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Unemployment Compensation Abuse, Taxpayer Abuse

By Art Gallagher

This is one of those stories I thought twice about writing because I don’t want to give “the bad guys” any smart ideas.  I’ve always thought journalists who reported a crime, particularly a financial crime, and then described in detail how the crime was committed were being irresponsible.  I decided to run with it in order to faciliate the end of the abuse.

Two Middletown former employees who retired in the spring of this year have applied for unemployment compensation and been granted the weekly checks by the Department of Labor and Workforce Development, in addition to their pensions, over the objections of Middletown Township, according to Administrator Anthony Mercantante.  A third retiree who retired in late 2010 has been collecting unemployment compensation for most of this year.

Unlike private sector unemployment compensation whereby the employers pay a percentage of their payroll as an “insurance premium”  to the Department of Labor, Middletown in being billed by DOL for the entire amount that the “unemployed retirees” are collecting, according to Mercantante.  Thus Middletown taxpayers are paying these former employees not to work and paying their pensions.

This is an offensive new twist on double dipping. 

Mercantante said that the Department of Labor informed the township that the unemployment compensation was granted to the retirees because they claimed they would not have retired had the township not announced a layoff plan.

No one from the Department of Labor and Workforce Development was available to comment when I called this afternoon.  I will follow up with them on Monday. 

In the meantime, officials from other municipalities that have confronted the same situation are encouraged to use the comments section of this post to report the abuse.  Readers who are members of the Christie administration, legislators and members of the media, please take note.

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Posted: July 22nd, 2011 | Author: | Filed under: Department of Labor and Workforce Development, Middletown | Tags: , , | 3 Comments »

3 Comments on “Unemployment Compensation Abuse, Taxpayer Abuse”

  1. Sancho Panza said at 11:30 am on July 23rd, 2011:

    The Labor Dept. should read its own rules, which it is clearly violating:

    “Not all pensions affect unemployment claims, but some do. If you are receiving a pension from an employer you worked for during your Base Year Period, your unemployment benefits may be reduced by either 50% or 100% of your weekly pension amount, as follows:

    If your Base Year Period employer contributed the entire amount towards your pension and you contributed nothing, your unemployment benefits may be reduced by 100% of your weekly pension amount.

    For example, if your monthly pension amount is $1,000, your weekly pension amount is calculated to be $231. If your unemployment weekly benefit amount is $400, your weekly pension amount, $231, is subtracted from that, leaving you with $169.

    If both you and your employer contributed towards the pension, your unemployment benefits may be reduced by 50% of your weekly pension amount.

    For example, if your monthly pension amount is $1,000, your weekly pension amount is calculated to be $231. Since you contributed towards your pension, only half of your weekly pension amount ($116) is subtracted from your weekly benefit amount. If your unemployment weekly benefit amount is $400, half of your weekly pension amount, $116, is subtracted from that, leaving you with $284.

    If you contributed the entire amount towards the pension, and your employer contributed nothing, no reduction will be made to your unemployment benefits.”

    Nothing in there about fearing layoffs or exceptions for government workers.
    http://lwd.dol.state.nj.us/labor/ui/claim/pensions.html

    If you were involuntarily separated from work prior to the age of 59.5 years, a lump sum payment of retirement pension will reduce your unemployment benefits, either for the week in which the payment was received or, at your option, prorated to a weekly deduction using actuarial tables.

  2. M Laffey said at 8:07 am on July 24th, 2011:

    This is an easy one.
    If you retire from a position for any reason and recieve a pension for that job you should not recieve unemployment.
    No need for convuluted rules.

  3. MoreMonmouthMusings » Blog Archive » Handlin Addressing Unemployment Insurance Abuse By Public Retirees said at 5:28 pm on July 27th, 2011:

    […] MMM reported this abuse last Friday and encouraged our readers in the legislature, administration and media to do something about it.   Handlin is to be commended for taking up the challenge. […]