Unemployment insurance-federal compliance. |
13LSO-0171.C1 |
FISCAL NOTE
Source of Revenue Increase:
Increase in initial and unpaid balance penalty assessments on fraudulent overpayment of benefits to unemployment insurance compensation claimants.
Assumptions:
The Department of Workforce Services (DWS) estimates the current initial assessment penalty of 5% on benefits paid to claimants as a result of fraud generates $50,000 per year. The current 5% additional assessment on such benefit overpayments that are not repaid within six months of the initial assessment generates $50,000 per year as well (total $100,000 per year). This money is currently paid into the EMPLOYMENT SECURITY FUND for program administrative expenses related to overpayment collection, investigation, etc.
The proposed legislation increases the initial penalty assessment from 5% to 20% on all benefit overpayments that are a result of fraud. This is expected to generate an additional $150,000 per year. However, the allocation of the penalty revenue changes under the proposed bill whereby one-quarter (1/4) is distributed to the EMPLOYMENT SECURITY FUND and three-quarters (3/4) is distributed to the UNEMPLOYMENT TRUST FUND. The following table summarizes the fiscal impact of the proposed statute changes:
Current Provision |
Proposed Provision |
5% Initial Penalty = $50,000 per year |
20% Initial Penalty = $200,000 per year |
5% Additional Penalty = $50,000 per year |
5% Additional Penalty = $50,000 per year |
|
|
Total Revenue = $100,000 per year |
Total Revenue = $250,000 per year |
|
|
Distribution = |
Distribution = |
$100,000 - All revenue to EMPLOYMENT SECURITY FUND |
$62,500 - 1/4 to EMPLOYMENT SECURITY FUND |
|
$187,500 - 3/4 to UNEMPLOYMENT TRUST FUND |
Net Distribution |
|
($37,500) - reduced revenue to EMPLOYMENT SECURITY FUND ($62,500 - $100,000 = ($37,500)) |
|
$187,500 - increased revenue to UNEMPLOYMENT TRUST FUND ($187,500 - $0 = $187,500) |
Prepared by: Michael Swank, LSO Phone: 777-7881
(Information provided by Hayley Douglass, Wyoming Department of Workforce Services, 777-8229)