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TN jobless benefits could see cuts

9:03 AM, Apr 3, 2013   |    comments
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By Nate Rau, The Tennessean

Republican lawmakers are pushing legislation to slash dependent benefits for unemployed Tennesseans as a way to rein in a program that was expanded in 2009 under the federal American Recovery and Reinvestment Act.

The bill, which cleared a key House committee with little resistance on Tuesday, would save the state an estimated $62.5 million annually, according to the Tennessee Department of Labor. Those savings are necessary, supporters say, because $141 million in federal funds given to the state under the stimulus have run out, and Tennessee employers have had to pick up the bill.

A Democratic leader in the House called the proposal a bad bill that would hurt the unemployed in the state. But Republican leadership, including Lt. Gov. Ron Ramsey, said the state was fixing what amounted to an unfunded mandate.

Consideration of the bill comes one week after the Department of Labor's unemployment benefits program was blistered in a state audit that found fraud and mismanagement that "threatened the integrity" of the unemployment benefits system.

"This is the very definition of an unfunded mandate," said state Sen. Jack Johnson, R-Franklin, adding that the state needed to halt the expanded benefits in order to preserve the health of the unemployment insurance fund. "Experts say there's no way our fund could withstand another recession."

Under current state law, unemployed workers receive $15 per week for each dependent, with a cap of $50 per week, in addition to their regular unemployment check. The bill, sponsored in the House by Rep. Jimmy Matlock, R-Lenoir City, and in the Senate by Ramsey and Johnson, would end such dependent benefits.

Unemployment checks for individuals are capped at $275 per week. A family with four or more dependents receives an additional $50 each week.

The bill cleared the House Consumer and Human Resources committee Tuesday with a voice vote, though Democrats such as Rep. Mike Turner, D-Old Hickory, expressed their opposition. Turner criticized the bill as another effort to hurt Tennessee workers. Turner has been outspoken about Republican-backed bills related to workers' compensation.

"Obviously, I'm not supportive of this bill," he said.

State overpaid

Last week's audit report found that the Department of Labor and Workforce gave $73.4 million in unemployment benefits to ineligible claimants. The total includes overpayment resulting from fraud over the past six years and from the department's own errors over the past three years. Overpayments have "increased significantly" over the past three years, auditors found.

In addition to the benefit cuts, the new bill would increase the number of weekly computer audits of those receiving unemployment benefits from 1,000 per week to 1,500 per week. Anyone who has received unemployment benefits within the previous three years may be audited to discern whether they were conducting required job searches. Johnson said the Department of Labor has seen individuals whose unemployment benefits are audited under the program return to work five weeks faster than workers who were not audited.

In addition to eliminating dependent benefit payouts, the legislation would roll back the "base period requirement," or the minimum amount of time a person must have worked in order to qualify for benefits. Under the changes in the 2009 act, workers could qualify if they worked less than six months, which was the previous requirement. This legislation would revert back to the six-month standard.

Additionally, the legislation would deny benefits to anyone who loses his or her job as the result of being convicted or arrested for a crime committed in conjunction with a person's employment. The bill includes a claw-back provision which would allow for the state to attempt to collect benefits paid out to an employee charged with a crime related to his or her termination.

Finally, the bill would implement mandatory training for Department of Labor hearing officers, who decide whether a laid-off worker is due unemployment benefits.

The bill is being backed by the local chapter of the National Federation of Independent Businesses.

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