By Craig Smith

Published: Monday, March 4, 2013, 12:01 a.m.
Updated: Friday, March 29, 2013

State officials said they stopped unemployment payments from reaching almost 1,100 inmates in Pennsylvania's county prisons in January.

A new system thwarted inmates from collecting unemployment compensation by cross-matching their names with a Department of Labor and Industry database.

“It's an issue that many of us were concerned about,” said state Sen. John R. Gordner, R-Berwick, who chairs the Senate Committee on Labor and Industry. “I'm glad the system is operational.”

It works so well that officials are bumping up their estimate about how much fraud they might prevent.

They initially said the state could save almost $12 million a year by identifying and stopping jobless benefits to county jail inmates. The system saved more than half that in January, its first month in operation.

“We're certainly confident that we'll surpass our original estimate,” spokeswoman Sara Goulet said.

Such abuse has happened “for many years,” said Labor and Industry Secretary Julia Hearthway, who initiated the crackdown through her department's Office of Integrity, formed in 2011.

The government intends unemployment compensation for people who are laid off or lose their jobs when a company closes. Recipients must be ready to return to work and actively seeking another job.

That means someone in jail would not qualify.

“Clearly, this is not the population of people the unemployment compensation system was intended for,” said Alex Halper, manager of government affairs at the Pennsylvania Chamber of Business and Industry.

It is a nationwide problem.

The Department of Labor estimates $5.1 billion of the more than $45 billion in unemployment benefits paid between July 1, 2011, and June 30, 2012, was improper, such as going to people who collected checks after finding a job, said spokesman Jason Kuruvilla. About 3 percent resulted from fraud.

“The vast majority were the result of people who get jobs ... and continue to collect two to three weeks after they start work,” Kuruvilla said. “Their checks should end immediately after they begin working.”

The state's system utilizes the Pennsylvania Justice Network, or JNET, a secure database maintained by the Governor's Office of Administration for law enforcement agencies and prisons. When inmates enter a lockup, officials automatically compare their information against unemployment compensation lists.

“It almost works in real time,” said Dan Egan, spokesman for the Office of Administration. “When they're entering a name in the system, it's being cross-matched.”

When the department verifies a recipient of unemployment benefit is jailed, it stops the benefits. The person can reapply when released.

The system is used in 51 of Pennsylvania's 63 counties with jails. The goal is to expand it to all counties, Egan said.

Craig Smith is a staff writer for Trib Total Media. He can be reached at 412-380-5646 or csmith@tribweb.com.

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