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High-dollar unemployment overpayment reporting
Summary ETA revised how states reported high-dollar unemployment insurance overpayments on the ETA 227 form. The change set a $25,000 cumulative overpayment threshold for a claim and explained how to split fraud and non-fraud amounts between report lines. It attached replacement handbook pages; the letter's printed information-collection approval ended in 2017, so the current reporting rule needs separate verification.
Document
Federal guidance
Agency
U.S. Department of Labor, Employment and Training Administration (ETA)
Document number
UIPL No. 08-12, Change 1
Date issued
July 27, 2015
Status
Unknown
ETA's listing marks this change Active and its PDF prints an expiration date of Continuing, but the printed OMB approval for the ETA 227 report expired August 31, 2017; current reporting instructions are not established by this letter alone.
Status last verified October 24, 2026
Apply this to your situation
This page explains the general guidance. Ask about your specific situation and see what current federal labor law says, with citations.
About this page: The full text below is the official document from U.S. Department of Labor, Employment and Training Administration (ETA). Ezel adds the plain-English summary and tracks the document's status. The official source linked on this page is authoritative for any reliance.
CLASSIFICATION
EMPLOYMENT AND TRAINING ADMINISTRATION UI
ADVISORY SYSTEM CORRESPONDENCE SYMBOL
OUI/DPM
U.S. DEPARTMENT OF LABOR
DATE
Washington, D.C. 20210 July 27, 2015
ADVISORY: UNEMPLOYMENT INSURANCE PROGRAM LETTER NO. 08-12,
Change 1
TO: STATE WORKFORCE AGENCIES
FROM: PORTIA WU /s/
Assistant Secretary
SUBJECT: Consolidation of the Employment and Training Administration (ETA) 9000
and ETA 227 Reports
1. Purpose. To respond to questions regarding the changes to the ETA 227 Report,
“Overpayment Detection and Recovery Activities,” and to add to the instructions provided in
Unemployment Insurance Program Letter (UIPL) No. 08-12.
2. References.
• Executive Order 13520, Reducing Improper Payments and Reducing Waste in Federal
Programs, November 20, 2009;
• Office of Management and Budget (OMB) Memorandum M-15-02, Appendix C to
Circular No. A-123, Requirements for Effective Estimation and Remediation of Improper
Payments, October 2014;
• Employment and Training (ET) Handbook 401, Unemployment Insurance Reports
Handbook;
• ET Handbook 402, Unemployment Insurance Reports User Manual; and
• UIPL No. 08-12, Consolidation of the Employment and Training Administration (ETA)
9000 and ETA 227 Reports.
3. Background. For all programs that are susceptible to significant improper payments,
Executive Order 13520 requires agencies to produce a quarterly report of any "high-dollar"
overpayments (see section III.D). To comply with Executive Order 13520, in 2012 the U.S.
Department of Labor (Department) changed the ETA 227 Report to require that states report,
in more detail, the extent of their efforts to prevent, detect and recover improper
Unemployment Insurance (UI) payments. One of these changes was described as reporting
of fraud and non-fraud overpayments over the amount of $5,000 as a “high dollar
overpayment” sub-category under both the fraud and non-fraud overpayment sections.
OMB approved this definition of “high-dollar overpayments” for purposes of the
Department’s reporting of UI overpayments to comply with the Executive Order.
RESCISSIONS EXPIRATION DATE
None Continuing
Office of Management and Budget (OMB) Memorandum M-15-02 recently modified OMB
Circular A-123, Attachment C in part by modifying the definition for High Dollar
Overpayments applicable to state reporting on ETA 227.
The five changes made to the ETA 227 Report included both modifications to elements
already included in the report, as well as additions to the report to collect new data that assess
the states’ integrity efforts. UIPL No. 08-12 explains these changes in detail.
4. Additional Instructions. The definition for the High Dollar (Fraud and Non-fraud)
Overpayments has been modified in ET Handbook No. 401, Unemployment Insurance
Reports Handbook, section IV, chapter 3.
For purposes of completing ETA 227, High Dollar Overpayments occur when total
overpayments to an individual on a claim exceeds $25,000. Overpayments may be a single
overpayment or multiple overpayments established during or prior to the reporting quarter;
however, the high dollar overpayment is reported for the quarter in which the cumulative
amount overpaid to an individual on a claim exceeds $25,000.
The changes for instructions for lines 112 and 113 on the ETA 227 reflect the changes in the
definition of High Dollar Overpayments.
• Line 112. High Dollar Fraud Overpayment. Report those fraud cases and dollar amounts
of overpayments for a claim that exceeds $25,000 during the reporting quarter.
Overpayments may be for a single overpayment or for multiple overpayments established
during or prior to the reporting quarter. The high dollar overpayment is reported for the
quarter in which the cumulative amount overpaid exceeds $25,000.
If an overpayment exceeds $25,000, but part is fraud and part is non-fraud, report the
fraud portion on line 112 and the non-fraud portion on line 113. A case count will be
reported on the line with the higher dollar amount. If the amounts are equal, a case count
will be reported on the fraud line (112).
• Line 113 High Dollar Non-Fraud Overpayment. Report those non-fraud cases and dollar
amounts of overpayments for a claim that exceeds $25,000 during the reporting quarter.
Overpayments may be for a single overpayment or for multiple overpayments established
during or prior to the reporting quarter. The high dollar overpayment is reported for the
quarter in which the cumulative amount overpaid exceeds $25,000.
If an overpayment exceeds $25,000, but part is fraud and part is non-fraud, report the
fraud portion on line 112 and the non-fraud portion on line 113. A case count will be
reported on the line with the higher dollar amount. If the amounts are equal, a case count
will be reported on the fraud line (112).
Reporting accurate data in lines 112 and 113 is important to meeting the requirements of
Executive Order 13520, Reducing Improper Payments and Reducing Waste in Federal
Programs.
5. OMB Approval. The ETA Overpayment Detection and Recovery Activities Report has
been approved by OMB in accordance with the Paperwork Reduction Act of 1995. The
OMB approval number is 1205-0187 with an expiration date of August 31, 2017.
6. Handbook Maintenance. States should replace the existing section IV, chapter 3 (ETA 227,
“Overpayment Detection and Recovery Activities”) dated April 2007 in ET Handbook No.
401, Unemployment Insurance Reports Handbook, with the attached revised section IV,
chapter 3.
7. Effective Date for Implementing Changes. Some minor programming is required in
accordance with the changes to the ETA 227 report. States should complete all programming
changes by September 30, 2015.
8. Action Requested. State administrators should distribute this advisory to appropriate staff.
9. Inquiries. Inquiries should be addressed to the appropriate Regional Office.
10. Attachment. Replacement pages for ET Handbook No. 401 Unemployment Insurance
Reports Handbook.
UI REPORTS HANDBOOK NO. 401
ETA 227 Overpayment Detection and Recovery Activities
CONTENTS
A. Facsimile of Form .........................................................................................IV-3-3
B. Purpose ..........................................................................................................IV-3-5
C. Due Date and Transmittal .............................................................................IV-3-5
D. General Reporting Instructions ...................................................................IV-3-6
E. Definitions......................................................................................................IV-3-6
1. Benefit Offset ..........................................................................................IV-3-6
2. Cases of Agency Employee Benefit Fraud ..............................................IV-3-6
3. Cases Established ..................................................................................IV-3-7
4. Cases Investigated..................................................................................IV-3-7
5. Cash ........................................................................................................IV-3-7
6. Claimant Errors. ......................................................................................IV-3-7
7. Controllable .............................................................................................IV-3-7
8. Employer Errors ......................................................................................IV-3-7
9. Federal Income Tax Offset ......................................................................IV-3-8
10. Fictitious Employer Detection Systems ...................................................IV-3-8
11. Fraud Overpayment ................................................................................IV-3-8
12. High Dollar (Fraud and Non-fraud) Overpayments..................................IV-3-8
13. IB Crossmatch.........................................................................................IV-3-10
14. Joint Claims.............................................................................................IV-3-10
15. Multi-Claimant Schemes .........................................................................IV-3-10
16. Multi-Claimant Scheme System ..............................................................IV-3-10
17. National Directories of New Hires ...........................................................IV-3-11
18. Noncontrollable Total ..............................................................................IV-3-11
19. Non-fraud Overpayment ..........................................................................IV-3-11
20. Overpayment...........................................................................................IV-3-11
21. Penalty ....................................................................................................IV-3-11
22. Receivables Removed at the End of Period ............................................IV-3-13
23. Recovered for Other States.....................................................................IV-3-14
24. Reversals ................................................................................................IV-3-14
25. Special Project ........................................................................................IV-3-14
26. State Directory of New Hires ...................................................................IV-3-14
27. State Agency Errors ................................................................................IV-3-14
28. State Income Tax Offset..........................................................................IV-3-14
29. UCFE/UCX ..............................................................................................IV-3-14
30. UI ............................................................................................................IV-3-14
31. Wage/Benefit Crossmatch.......................................................................IV-3-14
32. Waived ....................................................................................................IV-3-15
33. Written-Offs .............................................................................................IV-3-15
F. Item by Item Instructions ..............................................................................IV-3-15
1. Section A. Overpayments Established - Causes ....................................IV-3-15
2. Section B. Overpayments Established – Method of Detection ...............IV-3-16
UI REPORTS HANDBOOK NO. 401
ETA 227 Overpayment Detection and Recovery Activities
3. Section C. Recovery/Reconciliation .......................................................IV-3-18
4. Section D. Criminal/Civil Actions ............................................................IV-3-20
5. Section E. Aging of Benefit Overpayment Accounts ..............................IV-3-21
6. Comments ...............................................................................................IV-3-22
UI REPORTS HANDBOOK NO. 401
ETA 227 Overpayment Detection and Recovery Activities
A. Facsimile of Form
ETA 227 – OVERPAYMENT DETECTION AND RECOVERY
UI REPORTS HANDBOOK NO. 401
ETA 227 Overpayment Detection and Recovery Activities
UI REPORTS HANDBOOK NO. 401
ETA 227 Overpayment Detection and Recovery Activities
B. Purpose
The ETA 227 report provides information on overpayments of intrastate and
interstate claims under the regular state unemployment insurance (UI) program,
and under Federal UI programs including the Unemployment Compensation for
Federal Employees (UCFE) and Unemployment Compensation for Ex-
Servicemembers (UCX) programs, established under Chapter 85, Title 5, U.S.
Code. This report includes claims for regular, state additional (both are reported in
the columns indicated as UI), and the permanent federal-state Extended Benefits
(EB) programs. This report does not include claims of Trade Readjustment
Allowances (TRA), Disaster Unemployment Assistance (DUA), or any other
episodic or temporary Federal extension program; such programs have their own
separate forms and reporting instructions.
The state agency's accomplishments in principal detection areas of benefit
payment control are shown on the ETA 227 report. The Employment and Training
Administration (ETA) and state agencies need such information to monitor the
integrity of the benefit payment processes in the UI system. Data are provided for
the establishment of overpayments, recoveries of overpayments, criminal and civil
actions involving overpayments obtained fraudulently, and an aging schedule of
outstanding benefit overpayment accounts.
C. Due Date and Transmittal
The ETA 227 report is due quarterly on the first day of the second month after the
quarter of reference.
Report for Quarter Ending Due the Following
March 31 May 1
June 30 August 1
UI REPORTS HANDBOOK NO. 401
ETA 227 Overpayment Detection and Recovery Activities
September 30 November 1
December 31 February 1
D. General Reporting Instructions
All applicable data on the ETA 227 report should be traceable to the data regarding
overpayments and recoveries in the state's financial accounting system.
1. Amended Reports. If the information changes from that sent on the initial
ETA 227 report covering the report period, the state agency will send an
amended ETA 227 report electronically.
2. Coverage. Reported activity pertains to regular state UI benefits, benefits
paid under the UCFE and UCX programs, federal-state EB, and wholly state
financed "additional" benefits.
3. Audits. Dollar figures should be traceable to data regarding overpayments
and recoveries in the state agency's financial accounting system.
4. Checking the Report. Entries should be made for all items. If no activity
corresponding to the items occurred during the report period, a zero should
be entered. A report containing missing data cannot be sent to the National
Office but can be stored on the state’s system. Edit checks can be found in
ETA Handbook No. 402, Unemployment Insurance Required Reports User’s
Manual, Appendix C.
E. Definitions
1. Benefit Offset. (Line 304) Benefits withheld by the state agency to satisfy the
requirement for a claimant to repay an overpayment.
2. Cases of Agency Employee Benefit Fraud (line 111) – Fraudulent activity by
agency personnel. Examples include when an agency employee:
a. Continues to file weekly certifications and fails to report earnings on
his/her UI claim after being hired/rehired with the state UI agency or later
reactivates his/her claim while still working and fails to report earnings.
b. Diverts benefits from another’s claim(s) that may be inactive and which
may involve changing the address and name on the claim to his/her own
address or issuing checks to a “drop address.”
c. Establishes a claim(s) with fictitious wages and issues benefits to
himself/herself or others.
UI REPORTS HANDBOOK NO. 401
ETA 227 Overpayment Detection and Recovery Activities
d. Processes a claim(s) for another or others knowing they do not meet
eligibility requirements.
e. Extorts money from a claimant(s) for authorizing benefits to which the
claimant(s) may or may not be entitled.
f. Participates in other activities, which leads to him/herself receiving UI
benefits to which they are not entitled.
3. Cases Established. Any single issue involving an overpayment that has been
determined for a claimant within a single calendar quarter and for which a
formal notice of determination has been issued. An overpayment that covers
one or more weeks (or partial weeks) of benefits shall be counted as one
case if all weeks of overpayments are included in the same notice of
determination. An overpayment covering consecutive weeks of benefits that
span two calendar quarters should be reported for the calendar quarter in
which the notice of decision is issued.
4. Cases Investigated. (Column 6) The number of cases emanating from a state
initiated overpayment detection process for which an investigation regarding a
potential overpayment has been concluded. Example: during a wage/benefit
crossmatch process, a state agency produces a printout identifying all benefit
payments matched against wages in the same quarter. After the printout is
screened, requests are sent to employers to identify which weeks in the
quarter were worked. When an employer reply indicates overlap with weeks
for which benefits were paid, claims are investigated to determine if they were
overpaid.
5. Cash. (Line 303) For the purpose of the ETA 227 report, “cash” means
money or ready currency repaid directly by the claimant to the state agency
for benefit overpayments.
6. Claimant Errors. (Line 107) Errors attributable to claimants include
misrepresentation of the facts, failure to provide timely and/or accurate
information to support a claim of benefits, or a general misunderstanding of
obligations and benefit rights.
7. Controllable. (Line 201) Actions initiated by the state agency for the purpose
of detecting overpayments, e.g., wage/benefit crossmatch, claims audits,
National Directories of New Hires and State Directories of New Hires.
8. Employer Errors. (Line 106) Errors attributable to employers include
noncompliance with notification and reporting requirements in a timely and/or
accurate manner, and incorrect reporting of base period wages.
UI REPORTS HANDBOOK NO. 401
ETA 227 Overpayment Detection and Recovery Activities
9. Federal Income Tax Offset. (Line 314) Money from a Federal income tax
refund that is withheld from a claimant by the Federal taxing authority and
transferred to the state agency to repay a benefit overpayment.
10. Fictitious Employer Detection Systems. (Line 205) A computerized system
for detecting fictitious employers as well as fictitious claimants and
multi-claimant schemes. In 1978, a model system was developed and called
FEDS (Fictitious Employer Detection System). Any such system that uses a
profile to identify characteristics that are common among individual employer
accounts involved in fictitious schemes is included in this definition.
11. Fraud Overpayment. An overpayment for which material facts to the
determination or payment of a claim are found to be knowingly
misrepresented or concealed (i.e., willful misrepresentation) by the claimant in
order to obtain benefits to which the individual is not legally entitled. All states
have definitions for fraud and impose disqualifications for fraudulent
misrepresentation to obtain or increase benefits.
12. High Dollar (Fraud and Non-fraud) Overpayments. (Lines 112 and 113) The
total overpayments established for a claim that exceeds $25,000 during the
reporting quarter. Overpayments may be for a single payment or for multiple
payments made during or prior to the reporting quarter. The high dollar
overpayment is reported for the quarter in which the cumulative amount
overpaid exceeds $25,000.
a. High Dollar amounts are claim-specific. If an overpayment is established
for a claim in the quarter, determine if any other overpayments have been
established for that claim for the benefit year. It is not necessary to
identify overpayments established for the same individual in prior benefit
years.
Example 1: If an overpayment of $10,300 is established during the April -
June 2015 reporting quarter and the benefit year beginning (BYB) date is
October 12, 2014 (UI claim). There were no overpayments established
during the December 2014 quarter, but $17,000 in overpayments was
established in the March 2015 quarter. A high dollar overpayment of
$27,300 will be reported on the June report. It is not necessary to query
the system for overpayments on claims with benefit years prior to the
October 12, 2014 claim for the same individual.
Example 2: An appeals decision results in the establishment of
overpayments of $27,600 for a claim with a BYB date of 2/12/2012.
Determine whether any other overpayments have been established for
that claim, and report the total high dollar amount (the $27,600 from the
appeals decision plus any additional overpayments established). It is not
UI REPORTS HANDBOOK NO. 401
ETA 227 Overpayment Detection and Recovery Activities
necessary to query the system for overpayments for other claims that
were established prior to or subsequent to the claim affected by the
appeal.
Please note that if a single overpayment determination in the reporting
quarter affects more than one benefit year (for example as a result of an
appeals decision or the confirmation of fraudulent claiming while
employed), report the full amount for both claims.
b. High Dollar overpayments are tracked and reported separately for each
program. During extended benefit periods, claimants may receive and
exhaust regular UI benefits and then qualify for EB, resulting in fraud and
nonfraud overpayments established for more than one program. Note:
there is no requirement to report High Dollar overpayments for the
Emergency Unemployment Compensation (EUC) program.
Example 1: A $25,800 overpayment was established for a UI claim, and a
$2,000 overpayment was established for an EB claim. Only the $25,800
will be reported as a High Dollar overpayment in the UI column. The EB
overpayment does not meet the greater than $25,000 threshold and is not
reported as a High Dollar overpayment.
Example 2: A $25,100 overpayment was established for a UI claim, and a
$25,700 overpayment was established for an EB claim. Both
overpayments will be reported as High Dollar overpayments. The $25,100
will be reported in the UI column, and the $25,700 will be reported in the
EB column.
Example 3: An $18,000 overpayment has been established for a UI claim,
and a $10,000 overpayment has been established for an EUC claim.
Although the combined overpayment is $28,000, no High Dollar
overpayment will be reported, because the overpayment in the state UI
program does not meet the High Dollar threshold of more than $25,000.
c. High Dollar overpayments that are totally offset are reported. That an
overpayment was offset or subsequently recovered by other means is
irrelevant to High Dollar reporting.
d. Cumulative overpayments for a claim are reported in the quarter that they
exceed $25,000. Overpayments in subsequent quarters are counted
toward a new High Dollar threshold.
Example 1: If an $8,500 overpayment was established in the 1st quarter, a
$12,000 overpayment was established in the 2nd quarter, and a $7,500
UI REPORTS HANDBOOK NO. 401
ETA 227 Overpayment Detection and Recovery Activities
fraud overpayment in the 3rd quarter, a High Dollar overpayment of
$28,000 will be reported in 3rd quarter.
Example 2: If an $18,500 overpayment was established in the 1st quarter,
an $8,000 overpayment was established in the 2nd quarter, and a $7,500
fraud overpayment in the 3rd quarter, a High Dollar overpayment of
$26,500 will be reported in 2nd quarter.
13. IB Crossmatch. (Line 203) The Interstate (interstate benefits (IB) Crossmatch
includes two components -- the Interstate Crossmatch and Claimant Locator.
The Crossmatch component is used to match interstate claimants against the
agent/residence (and sometimes their border state) wage and benefit files to
detect unreported wages and/or duplicate claims. The Locator component is
used by states to locate individuals with outstanding overpayment balances
that the state is unable to locate using available state records. In either case,
the state requesting the match creates and sends a record that includes the
claimant’s social security number and a type of request identifier (crossmatch
or locator) to the destination state(s). The responding state matches the
records against its wage and benefit files. For each “hit,” the responding state
creates a response record that includes the reported quarterly wages,
employer’s name and address, claimant address (if locator record type), etc.,
as is appropriate to the type of request.
14. Joint Claims. Any combination of UI, UCFE, and UCX. In all joint claims,
involving both state UI trust funds and Federal program funds, the “number of
cases” should be reported under UI only. However, the “dollar amounts” of
such overpayments should be allocated to the appropriate columns which
represent the pro rata share of the weekly benefit amount. Payments made
under incorrect programs do not constitute an overpayment when
administrative adjustments or transfers are made. However, payments in
excess of allowable amounts that cannot be cleared by an administrative
adjustment constitute an overpayment.
15. Multi-Claimant Schemes. (Line 102) Any scheme where an individual or
group of individuals collects benefits by fraudulently establishing multiple
claims (may also involve fictitious employer schemes). If a multi-claimant
scheme involves agency staff, also report this scheme on line 111.
16. Multi-Claimant Scheme System. (Line 205) Any proactive, systematic
detection activity that uses profiling for the purpose of identifying fictitious
employers or fictitious claimants. An example is the Fictitious Employer
Detection System, the model computerized system developed in 1978. Also
included in this category are systems used to detect legitimate employers
involved with schemes that involve “ghost” employees, and multi-claimant
schemes not involving employers such as third party fraud schemes.
UI REPORTS HANDBOOK NO. 401
ETA 227 Overpayment Detection and Recovery Activities
17. National Directories of New Hires. (Line 210) The Personal Responsibility
and Work Opportunity Reconciliation Act of 1996 (PRWORA), otherwise
known as “Welfare Reform,” requires states to maintain New Hires Directories
for the purpose of locating parents who are behind in payment of child
support. Employers are required to report “new hires” information, including
wage information, to states, which is then reported to the National Directory of
New Hires maintained by the Department of Health and Human Services.
State UI agencies run crossmatches of this information against UI benefit
payment records to identify claimants who have failed to report earnings and,
therefore, may have been overpaid UI benefits.
18. Noncontrollable Total. (Line 208) All categories of overpayments for which
the state agency did not take an active role in detection. For example: tips
and leads, employer protests of benefit charges, appeal reversals in favor of
the employer, etc.
19. Non-fraud Overpayment. An overpayment which the state agency
determines is not due to willful misrepresentation. Non-fraud overpayments
include overpayments resulting from reversals, state agency errors, employer
errors, and claimant errors.
20. Overpayment. Benefits paid to an individual who is not legally entitled to
these benefits, whether or not the amount is later recovered or waived.
Losses through embezzlement or by theft, other than through the benefit
payment process, should not be counted as overpayments.
21. Penalty. (Line 109) Many states assess penalties for fraud. These penalties
can be applied in numerous ways.
a. The only type of penalty reportable on the ETA 227 report is the penalty
that meets the following description:
Benefits properly paid that were retroactively included in a penalty
assessed for a fraudulent overpayment of another week(s) and are,
therefore, subject to recoupment. Example: A claimant has been paid
benefits for 18 weeks. The state determines that week number four was a
fraud overpayment attributable to the claimant and assesses a penalty of
10 weeks in addition to the overpayment assessed for week number four.
Week number four would be reported as Fraud, and weeks 5-14 would be
reported as a Penalty.
b. Penalties assessed that are not reportable on the ETA 227 report are:
1) Benefits that were claimed and reduced because of a penalty applied
to future weeks claimed. Example: Week number eight was
UI REPORTS HANDBOOK NO. 401
ETA 227 Overpayment Detection and Recovery Activities
fraudulently claimed; this was detected during week number 17. The
state disqualifies the claimant for week number eight plus three weeks
of future benefits, applied to weeks 17-19. Weeks 17-19 become
noncompensable, and the claimant must certify for these weeks in
order to purge the disqualification and collect additional benefits. The
maximum benefit amount (MBA) is reduced by the dollar amount of
these weeks. Week number eight would be reported as fraud and
weeks 17-19 are not reported on the ETA 227 Report.
2) Penalties that disqualify a claimant from future weeks of benefits or
reduce the MBA, that do not become “overpayments” because those
weeks are never claimed.
i. If a state’s law provides that a penalty only delays payment of
benefits, i.e., benefits can be collected at the end of the claim and
the MBA is not affected, this is not reportable on the ETA 227
report.
ii. A penalty (or interest) added to the recoverable amount of
fraudulent overpayments that does not represent benefits paid or
benefits potentially payable, i.e., penalty/interest that was not paid
from the UI Trust Fund but was assessed in conjunction with an
overpayment of benefits. These types of penalties could be
assessed in different ways, including (1) as a percentage (e.g.,
state assesses a penalty at the rate of 50% of the benefits obtained
by fraud) or (2) as a dollar amount (e.g., state assesses a penalty
of $50 for each incidence of a false statement that results in a
fraudulent overpayment).
c. Disposition of penalty/interest. The Trade Adjustment Assistance
extension Act of 2012 (TAAEA) requires states to assess a mandatory
penalty equal to fifteen percent (15%) of any overpayment due to fraud.
State laws govern the disposition of penalty/interest assessed on
compensation that is paid in conjunction with overpayments of state UI
benefits.
1) Section 303(a)(11), SSA requires that states must deposit the
Federally mandatory 15% penalty on fraud overpayments into the
states’ UI trust funds and not into the fund from which the payment was
made.
2) TAAEA also requires, as a condition of administering any Federal UI
program, that states assess penalties against claimants that were
overpaid due to fraud in the same manner as the state assesses and
deposits the penalties under state law implementing section
UI REPORTS HANDBOOK NO. 401
ETA 227 Overpayment Detection and Recovery Activities
303(a)(11), SSA. In other words, states must apply the same federally
mandatory 15% to any Federal UC program fraud overpayment and
deposit the penalties into the states’ UI trust fund.
3) If state law provides for a penalty greater than the federally mandatory
15% penalty, the state may at their discretion deposit the amount
above the 15% penalty, in any amount the states determine, into
accounts other than the states’ UI trust fund. The collection of this
penalty/interest must be reported on:
• The ETA 191 report – “Statement of Expenditures and Financial
Adjustments of Federal Funds for Unemployment Compensation for
Federal Employees and Ex-Servicemembers”; and
• The ETA 2112 report – “UI Financial Transaction Summary”
22. Receivables Removed at the End of Period. (Line 312) Receivables for which
the prospects of collection are unlikely. Not all states have law provisions that
permit write-off of overpayments, and therefore, over the years these states
have accumulated very large dollar amounts of receivables on their books,
even though the state will not likely recover much of the total. This has
created an administrative burden to maintain these records. It has also
distorted the amount of overpayments that are shown as collectible, both at
the state and national levels.
Formerly, an “allowance for doubtful accounts” had been created for state
agencies to enter an amount of receivables for which the prospects of
collection were improbable. This item revises “allowance for doubtful
accounts” by specifying that receivables will be removed from the report after
two years unless recovery is in progress, i.e., currently being offset from a
benefit claim, installment repayments in progress, legal/civil action in
progress, etc. These are the basic principles to be followed in determining
whether an overpayment balance is in active collection status.
a. The state must be actually recovering portions of the balance at the end of
the report quarter, and
b. The collection/recovery process must still be underway at the end of the
quarter.
c. If these two conditions are not met, the overpayment balance is to be
removed at the end of the report quarter, and any subsequent recoveries
are to be reported in the appropriate Recovered line of Section C of the
UI REPORTS HANDBOOK NO. 401
ETA 227 Overpayment Detection and Recovery Activities
227, with a balancing entry equal to the amount recovered on line 310,
Additions.
23. Recovered for Other States. (Line 321) Overpayments, including penalty
and/or interest, recovered for and transferred to another state.
24. Reversals. (Line 104) Those overpayments that result from redeterminations
or appeal decisions that reverse or overturn earlier determinations under
which benefits were paid.
25. Special Project. (Line 206) This category is reserved for special detection
methods/projects using new methods or technologies.
26. State Directory of New Hires. (Line 204) The Personal Responsibility and
Work Opportunity Reconciliation Act of 1996 (PRWORA), otherwise known as
“Welfare Reform,” requires states to establish New Hires Directories for the
purpose of locating parents who are behind in payment of child support.
Employers are required to report “new hires” information, including wage
information, to states, which is then reported to the National Directory of New
Hires. State UI agencies run crossmatches of this information against the UI
benefit payment records to identify claimants who have failed to report
earnings and, therefore, may have been overpaid UI benefits.
27. State Agency Errors. (Line 105) State workforce agency actions or omissions
that cause errors in computing the benefit amount, payment for a non-
compensable waiting week, incorrect weekly payment for failure to consider
deductible amount, payment beyond the expiration of the benefit year ending
date or exhaustion of benefits, payment under incorrect program, payment
during a period of disqualification, payment to the wrong claimant, etc.
28. State Income Tax Offset. (Line 305) Money from a state income tax refund
that is withheld from a claimant by the state taxing authority and transferred to
the state agency to repay a benefit overpayment.
29. UCFE/UCX. Claims filed under the UCFE and/or the UCX program, including
the federal-state EB program.
30. UI. Claims under regular state UI benefits involving state UI funds, including
state additional benefits. Also included in UI are joint claims (see definition
for joint claims.)
31. Wage/Benefit Crossmatch. (Line 202) Comparison of state agency benefit
payment records with wage records created from quarterly reports submitted
by employers to determine if the benefits were overpaid due to failure to
report earnings. This definition includes the “Model Crossmatch System,” any
UI REPORTS HANDBOOK NO. 401
ETA 227 Overpayment Detection and Recovery Activities
enhancements to this model system or any similar system
developed/purchased by a state agency.
32. Waived. (Line 308) A non-fraud overpayment for which the state agency, in
accordance with state law, officially relinquishes the obligation of the claimant
to repay. Usually, this is authorized when the overpayment was not the fault
of the claimant and requiring repayment would be against equity and good
conscience or would otherwise defeat the purpose of the UI law.
33. Written-Offs. (Line 309) An amount of overpayment not subject to further
recovery because of a state law provision authorizing cancellation of the
overpayment. Usually, write-offs are applied after the statute of limitations
expires, bankruptcy has been approved by a court, or the claimant has died.
F. Item by Item Instructions
Reporting instructions for specific items are given only as necessary to supplement
headings on the form and the definitions provided in Section E of these
instructions.
1. Section A. Overpayments Established - Causes. Overpayments established
are classified into two main categories – fraud and non-fraud, with penalty
shown separately. Non-fraud overpayments are broken out into
subcategories.
a. Line 101, Fraud - Total. Enter the totals for all overpayments classified as
fraud, including and in addition to those reported on lines 102 and 111.
b. Line 102, Multi Claimant Schemes. Report those cases and dollars
included in line 101 that involved multi-claimant schemes detected in any
manner, i.e., through a fictitious employer detection system, tips/leads,
audits conducted for other purposes, etc.
c. Line 111, Cases of Agency Employee Benefit Fraud. Report those fraud
cases and dollar amounts that included agency staff as a recipient of the
UI benefits, and those where an agency staff member acted in collusion
with others to set up fraudulent claims and benefit payments and/or
schemes.
d. Line 112. High Dollar Fraud Overpayment. Report those fraud cases and
dollar amounts of overpayments for a claim that exceeds $25,000 during
the reporting quarter. Overpayments may be for a single payment or for
multiple payments made during or prior to the reporting quarter. The high
dollar overpayment is reported for the quarter in which the cumulative
UI REPORTS HANDBOOK NO. 401
ETA 227 Overpayment Detection and Recovery Activities
amount overpaid exceeds $25,000.
e. If an overpayment exceeds $25,000, but part is fraud and part is non-
fraud, report the fraud portion on line 112 and the non-fraud portion on line
113. A case count will be reported on the line with the higher dollar
amount. If the amounts are equal, a case count will be reported on the
fraud line (112).
f. Line 113 High Dollar Non-Fraud Overpayment. Report those non-fraud
cases and dollar amounts of overpayments for a claim that exceeds
$25,000 during the reporting quarter. Overpayments may be for a single
payment or for multiple payments made during or prior to the reporting
quarter. The high dollar overpayment is reported for the quarter in which
the cumulative amount overpaid exceeds $25,000.
g. If an overpayment exceeds $25,000, but part is fraud and part is non-
fraud, report the fraud portion on line 112 and the non-fraud portion on line
113. A case count will be reported on the line with the higher dollar
amount. If the amounts are equal, a case count will be reported on the
fraud line (112).
h. Line 103, Non-fraud - Total. Enter the totals for all overpayments
classified as non-fraud, i.e., all items reported on lines 104 -108. For
overpayments that can be traced to one or more sources of error; i.e.,
state agency, employer or claimant, count only once under the primary
cause of the error.
i. Line 108, Other Errors. Enter all non-fraud overpayments not included on
lines 104, 105, 106, or 107. Examples include monetary redeterminations
that cause an overpayment, a back payment of pension or SSA, or other
deductible income that was not known to the claimant, agency or
employer at the time of filing the new claim or the weekly continued claim.
j. Line 109, Penalty. Enter the dollar amounts of benefits properly paid that
were retroactively included in a penalty assessed for a fraudulent
overpayment of another week(s) and are, therefore, subject to
recoupment. (Refer to the definition of “Penalty” in Section E.)
k. Line 110, Total - Fraud, Non-fraud, and Penalty. Sum the totals for lines
101, 103, and 109.
2. Section B. Overpayments Established - Methods of Detection. Note: The
penalty (reported on Section A, line 109) is not applicable and is not reported
in Section B. EB data should be included in Section B.
UI REPORTS HANDBOOK NO. 401
ETA 227 Overpayment Detection and Recovery Activities
a. Column (6), Number of Cases Investigated. For lines 202-204 and 210,
enter the number of cases investigated to conclusion during the reporting
quarter. Example: during the crossmatch process, a state agency
produces a printout identifying all claimants with wages in the quarter.
After the printout is screened, requests are sent to employers to ascertain
which weeks were worked. If, for example, an employer reply indicates
that there is overlap with the weeks for which benefits were paid, claims
are investigated to determine if they were overpaid. The number of such
investigations during the quarter is reported in column (6).
For line 205, enter the number of schemes that were detected and for
which figures are reported in columns (7) and (8). Note: only report the
count for a scheme during the quarter in which it is first detected, i.e., if
additional cases/dollars are detected during the quarter for a scheme
reported in column (6) for a previous quarter, do not enter a count for that
scheme in the current quarter.
b. Column (7) and (9), Number of Cases (established). Enter the number of
cases for which a formal notice of determination was issued, after the
case has been investigated to conclusion.
c. Line 201, Controllable - Total. Enter the total of all controllable cases and
dollars reported on lines 202-207, and 210.
d. Line 202, Wage/Benefit Crossmatch. Enter the number of cases
investigated and established through the use of Wage/Benefit
Crossmatch.
e. Line 203, IB Crossmatch. Enter the number of cases investigated and
established through the use of IB Crossmatch.
f. Line 204, State Directory of New Hires. Enter the total cases
investigated and established through the use of the State Directory of
New Hires.
g. Line 210, National Directory of New Hires. Enter the total cases
investigated and established through the use of the National Directory of
New Hires. Note: State Directory of New Hires and National Directory of
New Hires programs are sometimes run simultaneously; however, the
data should be reported separately on Line 204 and Line 210.
h. Line 205, Multi-Claimant Scheme Systems. Only enter the figures for the
multi-claimant schemes detected through proactive, systematic processes
designed for this purpose (refer to the definition in section E above).
UI REPORTS HANDBOOK NO. 401
ETA 227 Overpayment Detection and Recovery Activities
i. Line 206, Special Project. This line is reserved for special detection
methods/projects using new methods or technologies. Please identify the
Special Project in the comment section.
j. Line 207, Other. All other controllable detection methods not included on
lines 202-206 and 210 above. Examples: verification of low earnings,
verification of return-to-work, Systematic Alien Verification Entitlement,
workers compensation crossmatch, etc.
k. Line 208, Noncontrollable Total. All categories of overpayments for which
the state agency did not take an active role in detection. For example:
tips and leads, appeals reversals, employer protests of benefit charges,
etc.
l. Line 209, Total – Controllable and Noncontrollable. Enter the totals for
lines 201 and 208.
3. Section C. Recovery/Reconciliation. In this section of the report, the penalty
(as reported on line 109 of section A) is to be included as non-fraud, columns
13 and 14, as appropriate.
For recoveries, waivers, and write-offs, enter the amounts applicable during
the quarter, regardless of when overpayments were established. Any
repayment received from a claimant that is refunded during the quarter
because of a redetermination, etc., should be subtracted from the amount
shown if the original amount had already been entered.
a. Line 301, Outstanding at the Beginning of Period. Enter amounts of
overpayments outstanding at the beginning of this report period. The
amounts entered will always be the same as the amounts outstanding at
the end of the preceding report period – line 313.
b. Line 302, Recovered - Total. Enter the amounts of all overpayments
recovered. The amounts will be equal to the totals of lines 303-307 and
314.
c. Line 303, Cash. Enter the amounts of all cash repayments made by the
claimant to the state agency, i.e., currency, check, money order, etc. Do
not include money received via a third party, i.e., liens, garnishments, etc.,
that are included in line 307.
d. Line 304, Benefit Offset. Enter the amounts of all dollars recovered
through UI benefit offset during the quarter from benefits otherwise
payable.
UI REPORTS HANDBOOK NO. 401
ETA 227 Overpayment Detection and Recovery Activities
e. Line 305, State Income Tax Offset. Enter the amounts withheld from
claimants by the state taxing authority and transferred to the state agency
during the quarter to repay benefit overpayments.
f. Line 314, Federal Income Tax Offset. Enter the amounts withheld from
claimants by the Federal taxing authority and transferred to the state
agency during the quarter to repay benefit overpayments. To compute the
quarterly amounts offset, use the monthly payment file sent to the state by
the U. S. Department of Treasury’s Financial Management Services.
g. Line 306, By Other States. Enter the amounts recovered by other state
agencies under the CWC requirements or voluntarily, including IRORA,
and transferred to the state during the quarter.
h. Line 307, Other. Recovery of benefit overpayments from sources not
listed on lines 303-306 above, e.g., other types of offsets (disability
insurance, workers compensation), court actions (civil, criminal),
outsourcing (collection by other components of the state government or by
private collection agencies).
i. Line 308, Waived. Enter the overpayment recoveries waived under state
law during the report period. Include only overpayments reported in
Section A, either for the current quarter or a previous quarter. Do not
include overpayments that the state agency no longer has the authority to
recover because of expired statute of limitations (write-offs).
j. Line 309, Written-Off. Enter the amounts of all overpayments written-off
under the state law during the report period, excluding those dollars that
have been previously removed from the reporting system as required by
the instructions for line 312.
k. Line 310, Additions. Enter the dollar amounts of overpayments adjusted
upward which have been included in Section A either for this report or any
prior report period. Such adjustments may be the result of
redeterminations or appeal decisions that increase the amount of
overpayments previously reported. If overpayments were recovered
during this report period after they had been removed from the reporting
system during a previous report period (i.e., reported on line 312 –
Receivables Removed at End of Period), the amounts recovered are to be
entered here in order to reinstate the overpayment and reflect an accurate
ending balance for the period on line 313.
l. Line 311, Subtractions. Enter the dollar amounts of overpayments
adjusted downward which have been included in Section A for this report
UI REPORTS HANDBOOK NO. 401
ETA 227 Overpayment Detection and Recovery Activities
or any prior report period. Such adjustments are usually the result of
redeterminations or appeals decisions that decrease the amount in part or
in total of overpayments previously reported.
m. Line 312, Receivables Removed at End of Period. Enter dollar amounts
included on line 301 (Outstanding at Beginning of Period) that have been
reported in Section E, line 506 (dollar amounts receivable 451 days or
more) each of the last three report periods, unless recovery is in progress.
This reporting procedure applies only to the ETA 227 report; it does not
affect state accounting practices. Note: See instructions for line 310
(Overpayments – Additions) regarding reinstatement of amounts removed
during a previous report period.
n. Line 313, Outstanding at the End of Period. Calculate the dollars
outstanding as follows:
1) Column 11. (1) Add lines 301 and 310 to line 101, column 4. (2) Add
lines 302, 309, 311, and 312. (3) Subtract (2) from (1).
2) Column 12. (1) Add lines 301 and 310 to line 101, column 5. (2) Add
lines 302, 309, 311, and 312. (3) Subtract (2) from (1).
3) Column 13. (1) Add lines 301 and 310 to line 103 and 109, column 4.
(2) Add lines 302, 308, 309, 311, and 312. (3) Subtract (2) from (1).
4) Column 14. (1) Add lines 301 and 310 to line 103 and 109, column
(2) Add lines 302, 308, 309, 311, and 312. (3) Subtract (2) from (1).
5) Column 22. (1) Add lines 301 and 310 to line 101, Column 20. (2)
Add lines 302,309, 311 and 312. (3) Subtract (2) from (1).
6) Column 23. (1) Add lines 301 and 310 to lines 103 and 109,
Column 21. Add lines 302,308, 309, 311, and 312. Subtract (2)
from (1).
o. Line 321, Recovered for Other States. Enter the amounts recovered by
the state for other state agencies under the CWC requirements or
voluntarily, including IRORA, and transferred out during the quarter.
Include penalty/interest. Note: figures on this line are not included in the
calculations for line 313.
4. Section D. Criminal/Civil Actions. Report on Lines 401 through 404 and 407,
fraud cases referred to state/local/Federal prosecuting authorities. Report in
Column 17 all prosecutions referred to the U.S. Department of Justice,
including those referred by the U.S. Department of Labor's Office of the
Inspector General (OIG).
a. Line 401, Number of Fraud Cases Pending Prosecution at Beginning of
Period. Enter the number of cases referred to state/local/Federal
prosecuting authorities where the institution and conduction of legal
proceedings is pending at the beginning of the reporting period.
b. Line 402, Number of Fraud Cases Referred for Prosecution during Period.
Enter the number of cases referred to state/local/Federal prosecuting
authorities during the reporting period.
c. Line 403, Number Cases Prosecution Refused. Include as refusals those
cases that were accepted by prosecuting authorities but were not
completed before the statute of limitations expired.
d. Line 404, Number Convictions Obtained. Count as convictions such court
imposed actions as Probation Before Judgment, Pre-Trial Diversion
Agreement, Suspended Imposition, or similar deferred sentencing
programs
e. Line 405, Number Cases Referred for Civil Action. Enter the number of
cases referred to state/local courts in order to obtain a formal judgment for
collection of an outstanding overpayment, e.g., liens, levies, garnishment
of wages.
f. Line 406, Number of Civil Actions Obtained. Enter the number of cases
where a formal decision was rendered by a court in the reporting quarter
to affect recovery of an outstanding overpayment, e.g., liens on real or
personal property, or attachments on wages or property.
g. Line 407, Number of Fraud Cases Referred for Prosecution Related to
Agency Employee Fraud. Enter the number of cases referred to
state/local/Federal prosecuting authorities that involved state agency
employee fraud, during the reporting period. Note: Items reported in Line
407 are also included in Line 402.
h. Line 408, Number Convictions Due to Employee Fraud. Count as
convictions such court imposed actions resulting from state agency
employee fraud, such as Probation Before Judgment, Pre-Trial Diversion
Agreement, Suspended Imposition, or similar deferred sentencing
programs. Note: Items reported on Line 408 are also included in Line
404.
5. Section E. Aging of Benefit Overpayment Accounts. The aging schedule
separates overpayments Outstanding at End of Period on line 313 by the
amount in each age category. The age of an overpayment amount is
determined from the date the overpayment was established. For purposes of
this report, the date an overpayment is established is the date the
overpayment determination was issued. The amount to be reported for each
benefit overpayment account should reflect the outstanding balance
(accounts receivable) at the close of business on the last day of the report
period. The sum of Total Accounts Receivable (line 507) must equal the sum
of Outstanding at End of Period (line 313).
The amount of overpayments outstanding in each age category under this
Section is not a cumulative amount from quarter to quarter. Dollar amounts
of overpayment accounts should be reported only once on lines 501-505 for
any single reporting period. On each subsequent report, the dollar amount of
any remaining balance will move to the next older aging category until it
reaches line 506 when it may be reported for three report periods before
being removed. For example, an overpayment of $100 was established and
became final on January 18, 2002. If a repayment of $50 was made on
August 5, 2002, and no further repayment is made, the amount of such
overpayment would be reported as follows:
Report Period Category Line $ Report
03/31/2002 90 days or less 501 $100
06/30/2002 91-180 days 502 $100
09/30/2002 181-270 days 503 $50
12/31/2002 271-360 days 504 $50
03/31/2003 361-450 days 505 $50
06/30/2003 451 days or more 506 $50
09/30/2003 451 days or more 506 $50
12/31/2003 451 days or more 506 $50
03/31/2004 451 days or more 506 ---
Note: If an overpayment established during the reporting quarter is for the
same claim as an overpayment that has reached the 451 days or more
category during that same quarter, the two overpayments would be combined
for purposes of determining if the High Dollar threshold is met.
6. Comments. Explain significant variations from the norm.
What does federal law require in your situation?
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