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Show Foundation fcults Utah's unemployment incentives Present unemployment compensation laws do not provide direct incentives for employees and employers to control unemployment benefit bene-fit costs. This observation was made by Utah Foundation, Founda-tion, the private research organization in a study of Utah's unemployment com -pensation program. The study points out that unemployment benefits are not subject to Federal and state taxes. As a result, some individuals . . . especially espe-cially secondary wage earn- that is the case nationally. According to the study, the ability of states to crack down on fraudulent claims was severely hampered in 1975 when the U. S. Department Depart-ment of Health, Education, and Welfare stopped the practice of allowing states to cross check unemployment benefit claims against Social Security reports filed by em -ployers. While it is not now known how much abuse or outright fraud exists in the unemployment insurance program, national estimates have placed the number oi illegitimate claims somewhere some-where between one percen) and five percent of the total case load. ers in a family . . . can obtain ob-tain nearly as much from unemployment benefits as they would receive in take-home take-home pay from gainful em -ployment. Thus, there often is little incentive for a secondary sec-ondary wage earner to seek new employment once he or she has qualified for unem -ployment benefits. In addition, Utah is one of the few states that does not use some type of chargeback charge-back system to finance its unemployment benefit program. pro-gram. Although the Utah program pro-gram is far simpler to administer ad-minister than a system where unemployment benefit bene-fit costs are charged back to former employers, it lessens les-sens employer interest in reporting fraudulent claims andor abuses in the program. pro-gram. Because the Utah program does not provide direct incentives in-centives for employees and employers to control unem -ployment benefit costs, the Foundation report notes that Utah's Employment Security Department has had to take some special steps to limit payments to eligible claimants. claim-ants. Utah expends a larger proportion of its administrative adminis-trative budget on benefit control con-trol and fraud prevention |