Arizona Unemployment Insurance Program Changes Coming

TUCSON, Ariz. (AP) – Thousands of Arizonans have fallen victim to identity theft during the pandemic, resulting in delayed or denied payments and financial devastation.

An expert claims that a simple modernization and security upgrade of Arizona’s decades-old unemployment insurance program could have avoided problems for victims and also saved the state billions of dollars , according to the Arizona Daily Star.

A plan to do this is underway.

The State Department of Economic Security will begin accepting contract proposals with one or more companies this month to modernize the unemployment insurance benefit system.

With unprecedented numbers of Arizonans facing unemployment during the pandemic, people have been forced to rely on state unemployment insurance, the new pandemic unemployment assistance program and other forms of state and federal aid.

DES worked with federal, state and local partners during the pandemic to provide support to those affected by job loss and other COVID-related issues and made improvements to existing programs to respond to the rise in demand for services and this work will continue, the Star reported.

The department will use funding from the Families First Coronavirus Response Act, the American Rescue Plan Act of 2021 and a “small surplus in an unemployment insurance administration fund” to pay for the technology upgrade, a decision resulting from the pandemic-related demand, DES director Michael Wisehart said.

The state will seek additional funding in the fiscal year 2023 budget to address potential gaps in funding for the overall project.

“The age and complexity of the existing unemployment insurance system will cost the state much more over the years as we continue to maintain, adjust and repair,” Wisehart said. “Modernizing the system doesn’t just make fiscal sense, it’s a critical investment in our workforce. This will help support those facing employment disruptions as the rest of the workforce development system works with them to bounce back and regain their place in the state economy.

There is no doubt about the benefits of modernizing the state system and it was long overdue, said Haywood Talcove, CEO of LexisNexis Risk Solutions Government Group.

“What happened was something that was completely preventable,” Talcove told The Star.

In addition to an unprecedented number of unemployment claims, the pandemic has also seen unprecedented fraud for a variety of reasons.

Data breaches before and during the pandemic resulted in the collection of a “stack of personally identifiable information from adversaries,” Talcove said.

Arizona has also seen job posting scams in which criminal groups have placed great ads on trusted job boards.

Thousands of unemployed Arizonans applied for these jobs, got a real interview and got hired.

“Suddenly you have a job that pays a lot more than what you did before,” Talcove said. “You’re excited, then they say they need to verify your identity. “

Using this form of social engineering, scammers were able to manipulate applicants into providing their personal information in the verification tool, and then use that information to claim unemployment on behalf of the applicants, thereby locking the legitimate claimant of the system, Talcove. said to the Star.

With around 18,000 bogus job postings identified online, the effect has been disastrous.

“Each identity they got was worth about $ 26,000. They found completely open systems, ”said Talcove.

Although the total amount lost to fraud is still unknown, the US Department of Labor has estimated losses nationwide at $ 87 billion, Talcove said.

Arizona’s unemployment rate fluctuated between 4.8% and 14.2% during the pandemic, according to statistics from the United States Bureau of Labor.

LexisNexis estimates Arizona’s potential losses from fraud at nearly $ 2 billion, although full accounting has yet to be done.

Arizona DES spokeswoman Tasya Peterson said in an email to The Star that fraudulent claims were an issue in all 50 states during the pandemic, but DES took “proactive and aggressive steps” to combat fraud in its programs, adding layers of protection to its systems to deal with the evolving threat.

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