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Reference. ET Handbook No. 401, 2nd Edition, Change No. 18.

Background. The Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) of 1996, otherwise known as "Welfare Reform," set requirements for States to establish New Hire Directories for the purpose of locating parents behind in payment of child support. PRWORA permits SESAs access to the information in the State Directory of New Hires. (However, at this time, Federal law does not permit access by the SESAs to the National Directory to which State Directory information is forwarded.)

Many SESAs are utilizing new hire information for Benefit Payment Control (BPC) purposes to prevent and detect benefit overpayments. Some SESAs have found this system to be much more efficient than the wage/benefit crossmatch system that, in the past, has been the primary method of detecting overpayments. This is possible because under the wage/benefit crossmatch system, the average length of time to detect overpayments is five to six months after the occurrence, frequently after claimants have exhausted benefits; while under the new hire system, overpayments can be detected early in the claims series, often intercepting payments before many weeks have been erroneously paid.

The ETA 227 Report, Overpayment Detection and Recovery Activity, collects data in Section C on the methods used to detect overpayments. Separate lines are designated for all the primary methods, including the wage/benefit crossmatch

system. However, because the new hire system is new, it is not included as a primary method of detection. Although, some SESAs may be recording data on new hire activity, currently it is not separately identifiable on the ETA 227 Report.

In order to promote the new hire system, and work toward further enhancements, the National Office plans to obtain data from all SESAs on overpayment detections resulting from this system.

Temporary Procedures. Section C, Line 308 of the ETA 227 Report is used to record "Other Controllable Activities" to detect overpayments. Change 18 to ET Handbook No. 401, 2nd Edition, issued on September 22, 1999, instructs SESAs to include new hire activity on Line 308. Since this line also captures overpayments detected through other methods, it will not be possible to sort the new hire data from the other data reported on that line. In order to accomplish this end, Change 18 of the Handbook recommends that SESAs identify the new hire data separately in the "Comments" section at the end of the report.

It is anticipated that separate reporting of new hire data will be required on a future revision to the ETA 227 Report.

Action Required. SESA Administrators are requested to provide this information to appropriate staff in the Benefit Payment Control unit. Additionally, SESAs are encouraged to use the Comments section of the ETA 227 Report to separately identify new hire data reported on Line 308.

Inquiries. Please direct inquiries to the Regional Office.

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