Thousands of inmates receiving unemployment, PA cracks down

HARRISBURG — People convicted of a crime can no longer get unemployment benefits, or so says Pennsylvania law.

But until recently the state had no sure way to stop payments from getting to inmates in county prisons, costing millions in fraudulent payments every year.

State officials announced a potential solution Tuesday. Using an existing data system called the Pennsylvania Justice Network, the state can cross-match inmate data with unemployment records to identify unemployment beneficiaries in county prisons and stop payments.

Sara Goulet, press secretary for the Department of Labor and Industry, said officials have already stopped payment to about 3,000 people, saving about $18 million in unemployment compensation payouts.

The department attaches an annual savings of about $6 million for every 1,000 unemployment compensation claimants identified, Goulet said. The savings are calculated using average unemployment payouts and duration.

Here's how inmates who no longer qualify for unemployment could continue collecting: Once someone begins receiving unemployment, benefits are renewed every two weeks, which can be done over the phone. The applicant can also have someone renew on their behalf. The majority of payments are received via direct deposit or applied to a debit card, eliminating the need for personal check-cashing.

The Department of Labor and Industry works with the Department of Corrections on a monthly basis to identify state prison inmates receiving unemployment benefits. But no similar setup was in place for county prison systems.

Instead, the primary way the state would learn about inmates collecting unemployment was for someone to report it to the state —maybe an intake officer finding an unemployment compensation debit card in a wallet or a relative or neighbor calling the state.

But even if fraud was identified, the money could still be lost for good.

"If someone continues to file or someone files on their behalf while they're in prison and then we find out they're doing it because we've gotten word through the prison or someone else, then we've got to reclaim the overpayments and that can be very difficult," Goulet said.

Now, individual inmate information will be automatically checked against unemployment compensation rolls. In the state's words, this is "saving the UC trust fund and the commonwealth's businesses and employees millions of dollars," a news release says.

The majority of Pennsylvania's county prisons – 51 out of 63 – already use JNET to access and cross-reference data such as criminal history, driving records, prison records and other inmate information, said Dan Egan, spokesman for the Office of Administration.

JNET has been around for about two decades, Egan said. Adding the unemployment compensation data-check started with a pilot program last May.

It took about a week, and maybe $5,000 worth of staff time, Egan said.

Contact Melissa Daniels at melissa@paindependent.com