Recently, the National Association of State Workforce Agencies (NASWA) released “A National View of UI IT Systems” which talks about all the problems associated with the age of a state’s Unemployment Insurance system.   

One of the benefits cited for updating old UI systems was that states with new systems “generally report faster and more accurate benefit payments.”  Intuitively you might think that states with older unemployment insurance benefit systems would have more trouble with maintaining control over their benefit integrity and have higher overpayment rates.  However, as this chart shows, that isn’t necessarily the case. 

The chart below compares the age of state UI Benefits Systems as reported in the NASWA Report to 2008 benefit overpayments as reporting in the Department of Labor Benefit Accuracy Measurement report for 2008 (2009 report has not yet been released). 

Surprisingly, there doesn’t appear to be any strong correlation between the age of the system and the benefit overpayment rate.  I do think there are many other reasons why it makes sense to invest in modernization of state systems as outlined in the NASWA Report, unfortunately we wouldn’t expect to see any major reductions in benefit overpayments as a result.

Tammy Mullin