Republicans in Madison and Washington are working to rein in those who get taxpayer-funded aid amid worries from social service advocates that the poor and underemployed are being unfairly targeted.
In Madison, a Republican bill would up the penalties for defrauding the state’s unemployment insurance fund.
And in Washington, the Trump administration is saying Wisconsin is now free to enact work requirements for some Medicaid enrollees.
The Madison bill’s GOP authors say stricter penalties are needed to help deter individuals from intentionally committing fraud and stealing from the taxpayers.
Currently, those who knowingly lie to get unemployment insurance benefits could be fined between $100 and $500 or imprisoned for up to 90 days, or both. The legislation, though, would create four tiers of penalties.
The first tier, in cases where the value of any benefits obtained doesn’t exceed $2,500, would increase the possible fines to up to $10,000 or up to nine months of imprisonment, or both. The second through fourth tiers would then trigger Class I, H and G felony charges.
Those penalties, co-authors Rep. Samantha Kerkman and Sen. Chris Kapenga said, would better align the penalties for unemployment insurance fraud with other kinds of theft, as well as respond to concerns raised in a previous audit of the Department of Workforce Development.
In the 2014 Legislative Audit Bureau report, DWD identified $86.3 million in overpayments due to fraud from 2011-2014. That accounted for 64,700 individuals.
Meanwhile, the audit also showed an additional $61.8 million in overpayments to 577,000 individuals who unintentionally provided inaccurate information to the agency.
Democrats and representatives from Legal Action of Wisconsin, though, raised concerns that workers who had no intention of breaking the law could find their futures in jeopardy under the bill’s penalties.
“Turning unemployed workers into felons as this bill seeks to do does not help workers get back to work,” Legal Action of Wisconsin’s Vicky Selkowe said.
Selkowe also called for developing punishments for employers who commit fraud, saying there’s currently a “lack of parallel fairness” for employers who, for example, deny workers overtime or benefits or knowingly misclassify workers as contractors.
But Kerkman, R-Salem, said the bill’s intent was only to zone in on those who were intentionally defrauding the system.
“I don’t want to hurt the folks who had the misreporting,” she said.
Representatives for DWD also testified in favor of the bill.
Kerkman and Kapenga, R-Delafield, previously introduced the bill last session. At the time, it cleared the full Assembly but ultimately died in the Senate.
The Medicaid work requirements were outlined by the Centers for Medicare and Medicaid Services.
In the 10-page memo, CMS said it will support state efforts to test incentives that make work participation or other community engagement a requirement for continued Medicaid eligibility. In a separate release, CMS says this new policy is responding to “numerous state requests” to test programs through Medicaid demonstration projects.
The Capitol Report is written by editorial staff at WisPolitics.com, a nonpartisan, Madison-based news service that specializes in coverage of government and politics.