No. 31971 (Amendment): R994-406-401. Claimant Fraud.

DAR File No.: 31971
Filed: 09/29/2008, 01:49
Received by: NL

RULE ANALYSIS

Purpose of the rule or reason for the change:

The purpose of this amendment is to require notification of incarceration.

Summary of the rule or change:

The Department has had several claims where weekly claims are filed by or on behalf of claimants who are in jail. Because the claimant is not eligible, when the Department learns of the incarceration we establish an overpayment. Claimants have defended against the overpayment by saying they did not file the weekly claims. The Court of Appeals overturned an overpayment under these circumstances. The Department believes the claimant either filed the weekly claims himself or herself or asked someone to do it for the claimant. Because benefits are issued on a debit card, it is difficult to prove who made the claims or spent the money. If a claimant is required to notify us of his or her incarceration, the Department will immediately stop all unemployment benefits. If the claimant does not notify the Department, it will result in a fraud overpayment. Claimants can send written notice, call collect, or have someone else notify us. Incarceration will be verified prior to stopping benefits.

State statutory or constitutional authorization for this rule:

Section 35A-1-104 and Subsections 35A-1-104(4) and 35A-4-502(1)(b)

Anticipated cost or savings to:

the state budget:

This is a federally-funded program and there will be no costs or savings to the state budget.

local governments:

This is a federally-funded program and there will be no costs or savings to any local government.

small businesses and persons other than businesses:

This is a federally-funded program and there will be no costs or savings to any small business or other persons. Because the Department always established these claims as fraud prior to the Court of Appeals case, there will be no savings to employers.

Compliance costs for affected persons:

This is a federally-funded program and there will be no costs or savings to any affected persons. There are no fees associated with this rule change. Incarcerated claimants can call the Department collect.

Comments by the department head on the fiscal impact the rule may have on businesses:

There are no compliance costs associated with this change. There are no fees associated with this change. There will be no cost to anyone to comply with these changes. There will be no fiscal impact on any business. These changes will have no impact on any employers contribution tax rate. Kristen Cox, Executive Director

The full text of this rule may be inspected, during regular business hours, at the Division of Administrative Rules, or at:

Workforce Services
Unemployment Insurance
140 E 300 S
SALT LAKE CITY UT 84111-2333

Direct questions regarding this rule to:

Suzan Pixton at the above address, by phone at 801-526-9645, by FAX at 801-526-9211, or by Internet E-mail at [e-mail]

Interested persons may present their views on this rule by submitting written comments to the address above no later than 5:00 p.m. on:

11/14/2008

This rule may become effective on:

11/21/2008

Authorized by:

Kristen Cox, Executive Director

RULE TEXT

R994. Workforce Services, Unemployment Insurance.

R994-406. Fraud, Fault and Nonfault Overpayments.

R994-406-401.Claimant Fraud.

(1)All three elements of fraud must be proved to establish an intentional misrepresentation sufficient to constitute fraud. See section 35A-4-405(5). The three elements are:

(a) Materiality.

(i) Materiality is established when a claimant makes false statements or fails to provide accurate information for the purpose of obtaining;

(A)any benefit payment to which the claimant is not entitled, or

(B)waiting week credit which results in a benefit payment to which the claimant is not entitled.

(ii)A benefit payment received by fraud may include an amount as small as one dollar over the amount a claimant was entitled to receive.

(b) Knowledge.

A claimant must have known or should have known the information submitted to the Department was incorrect or that he or she failed to provide information required by the Department. The claimant does NOT have to know that the information will result in a denial of benefits or a reduction of the benefit amount. Knowledge can also be established when a claimant recklessly makes representations knowing he or she has insufficient information upon which to base such representations. A claimant has an obligation to read material provided by the Department and to ask a Department representative if he or she has a question about what information to report.

(c) Willfulness.

Willfulness is established when a claimant files claims or other documents containing false statements, responses or deliberate omissions. If a claimant delegates the responsibility to personally provide information or allows access to his or her Personal Identification Number (PIN) so that someone else may file a claim, the claimant is responsible for the information provided or omitted by the other person, even if the claimant had no advance knowledge that the information provided was false or important information was omitted.The claimant is responsible for securing the debit card issued by the Department (EPPICard or card).Securing the card means that the card and the PIN are never kept together, the card is kept in a secure location, and the PIN is not known by anyone but the claimant.If a claimant loses his or her card, the claimant must report the loss of the card to the Department and change his or her PIN immediately even if the claimant is not currently filing weekly claims for benefits.If the claimant fails to report the loss of the card and change the PIN immediately, or fails to secure the card, the claimant will be liable for claims made and money removed from the card.

(2)The Department relies primarily on information provided by the claimant when paying unemployment insurance benefits. Fraud penalties do not apply if the overpayment was the result of an inadvertent error. Fraud requires a willful misrepresentation or concealment of information for the purpose of obtaining unemployment benefits.

(3)The absence of an admission or direct proof of intent to defraud does not prevent a finding of fraud.

(4)A claimant is required, under R994-403-114c, to immediately notify the Department if the claimant is incarcerated.Upon notification, the Department will stop all unemployment benefits to the claimant until the claimant notifies the Department of his or her release from incarceration.If a claimant fails to notify the Department of his or her incarceration, any claims made during the incarceration period will be considered fraudulent.

 

KEY: overpayments, unemployment compensation

Date of Enactment or Last Substantive Amendment:[July 26, 2006]2008

Notice of Continuation:May 22, 2007

Authorizing, and Implemented or Interpreted Law:35A-4-406(2); 35A-4-406(3); 35A-4-406(4); 35A-4-406(5)