The Kentucky Office of Unemployment Insurance recently announced a plan to reduce the taxes that employers will pay for unemployment benefits. This plan will prevent the impact of pandemic-related unemployment claims from negatively affecting tax rates. In addition, the Kentucky Office of Unemployment Insurance will stop charging employers for unemployment benefits in the third quarter of 2021. This is good news for those in need of employment assistance. But what are the challenges?
As the state faces a coronavirus pandemic, the Kentucky Unemployment Insurance System is being scrutinized by a task force. The state’s State Auditor, Mike Harmon, published an audit of the unemployment system earlier this year that revealed hundreds of millions of dollars in “questioned costs,” 400,000 unread emails seeking help, and people who worked in the unemployment office claiming benefits they weren’t eligible to receive. The Kentucky Unemployment Insurance Task Force, which is comprised of 80% Republicans, is tasked with identifying and fixing problems with the state’s unemployment system. Governor Andy Beshear’s handling of the unemployment system has been criticized by many who say the state has neglected to address the issues of fraudulent claims.
The Beshear Administration adopted an “auto-pay” model of unemployment insurance, which automatically paid benefits for the first two weeks of unemployment, with no eligibility verification. This small decision weakened the checks that ensure benefits are accurate and paid to the right people. Some experienced OUI employees have exploited loopholes and received benefits while working part-time, even if they weren’t eligible. The new system is expected to take effect by March 2020.
KYCC receives about 25,000 unemployment claims a week. However, it does not know if this figure is accurate, or if there were multiple fraudulent claims. In fact, the state inspector general’s report was sent to Beshear in February. The state’s unemployment insurance fraud investigation will help the agency address the problem. The task force will investigate fraudulent claims and prosecute those responsible. When this is complete, Kentucky will have a much better idea of how to prevent the state’s unemployment rate from rising in 2021.
The Kentucky Office of Unemployment Insurance has made changes during the COVID-19 pandemic that have helped those who are unemployed. These changes include general eligibility requirements and specific benefit information. You can also make a weekly claim to receive unemployment insurance benefits, as long as you are actively seeking work. If you do not find a job in the next four weeks, you will be denied benefits. Be sure to check with the Kentucky Office of Unemployment Insurance for more information.
In order to increase the amount of money you receive each week, you will have to make sure your weekly earnings are below 20 percent of the weekly unemployment benefit amount. If you earn more than 20 percent, you will have to lower your weekly earnings by that amount. Therefore, if you are working at an employer who does not offer unemployment benefits, you will be out of luck. COVID-19 has impacted the unemployed in Kentucky and is causing more uncertainty. Unemployment benefits are still available to those who have been laid off, but the waiting period is longer and you will have to pay more if you earn more than 20 percent of the weekly benefit.
If you are unemployed and have separated from your employer, the first step to obtain unemployment benefits is to file for COVID-19 unemployment insurance in Kentucky. In most cases, this will qualify you for benefits under the CARES Act. If you were previously self-employed, COVID-19 unemployment insurance in Kentucky will make it easier to secure the financial support you need to cover your living expenses. The benefits you receive will help you cope with the new reality of the COVID-19 pandemic.
Back-to-work incentive for UI claimants
Kentucky Gov. Andy Beshear announced this week that he will provide a back-to-work incentive of up to $1,500 to eligible Kentucky unemployment claimants who return to work between June 24 and July 30 of this year. The incentive will be paid to the first 15,000 people who meet the eligibility requirements: they must be 18 years old, a resident of Kentucky, and have an active unemployment insurance claim. The program will also require participants to work at least 120 hours in four weeks.
The Beshear administration has been working to improve its unemployment insurance processing and reinstate the incentive, but that’s going to be a difficult task. The administration has had to hire outside consultants to perform federal background checks and train employees for short-term work. These expenses would be prohibitive if the government needed to hire temporary staff to process claims. As a result, the Kentucky administration contracted with Ernst & Young to do these things and the bill ended up costing $14.5 million. Despite the recent budget cuts, however, the state has reinstated its back-to-work incentive for unemployment claimants in 2021.
In addition to paying $1,500 to the first 15,000 unemployed claimants who get a job, Kentucky is considering adding a new program to encourage these individuals to return to work. Under the program, employers will have to verify that they have provided 120 hours of work in four weeks following their unemployment. Beshear met with representatives from businesses and suggested that the state speed up the job verification process to ensure the maximum number of eligible claimants.
The recent COVID-19 pandemic and a growing backlog of unpaid claims have placed pressure on the unemployment system in Kentucky. In addition, this year’s Kentucky unemployment update has uncovered widespread fraud. The findings in the updated unemployment report show that security controls aren’t being implemented properly, and that the state’s system doesn’t accurately track fraud. In an effort to correct this problem, state officials have implemented an ongoing vulnerability scan and risk assessment program to prevent fraudulent claims from occurring.
The Kentucky unemployment office says half of the 82,000 unresolved claims from 2020 are likely fraudulent. The program was extended through the second coronavirus relief bill, but a new wave of fraudulent claims was discovered. The Kentucky unemployment office warns that these fraudulent claims are unlikely to be paid out because they were submitted using stolen Social Security numbers or because the applicants don’t answer personal questions. To report fraudulent claims, file an online form with the Kentucky unemployment office.
The Kentucky Office of Unemployment Insurance is aware of fraudulent email scams that try to convince people to send money to file UI claims. The state’s staff will never ask you to send money to work a claim. In addition, the Kentucky Attorney General’s office has a page dedicated to fraud identity theft. While the Kentucky unemployment update 2021 will help to protect Kentucky citizens from fraud, the system is still not foolproof.
Despite the ongoing crisis, the unemployment insurance system is struggling to deal with the increasing number of fraudulent claims. Since the coronavirus outbreak, Kentucky unemployment officials have warned that 60,000 claims pending are likely to be fraudulent. Because of the huge volume of fraudulent claims, the unemployment insurance system is struggling to keep up with the reports and process legitimate ones. One such victim is Patricia White, who lives in Colorado. She recently learned that someone had fraudulently filed a Kentucky unemployment claim in her name. Despite her attempts to contact the Kentucky unemployment hotline, she was unsuccessful.
Governor Beshear is working to rebuild Kentucky’s antiquated unemployment computer system, but the process is expected to take two to three years. The state recently closed down the unemployment system after an apparent hack attempt. The problems have become a political headache for the governor. A state official said the system was prone to glitches and was in need of technology overhaul. A bidder withdrew because of a high cost for enhanced security. The state will now issue a revised request for bids. The new round of bidding is not expected to delay the launch of the new system.
A Kentucky legislative panel has been looking into the problems with the state’s unemployment system. The labor secretary has said that rebuilding the system could take two or three years. In the meantime, Kentucky is in the final stages of selecting a contractor. While the rebuilding process is expected to take two to three years, state officials are seeking immediate improvements. In person appointments are helping to reduce the number of unresolved claims, but the state is awaiting a new contractor with expertise in the jobless claims system.
After the coronavirus infected thousands of Kentucky workers, the state faced a massive surge in jobless assistance claims. As a result, many Kentuckians waited months to have their claims processed. As a result, the Beshear administration hired an outside company to work through the claims backlog. The state paid the company $14.5 million to do this work. The work will be a crucial part of rebuilding the unemployment insurance system in Kentucky.