(1) A "fraudulent benefit overpayment" is a benefit overpayment created as the result of a disqualification, ineligibility, or reduction in benefit entitlement imposed on the basis of information not previously known by the department due to the claimant’s false statement or representation or failure to disclose a material fact in order to obtain or increase benefits.

(2) The penalty referred to in 39-51-3201, MCA, for the first offense is 50 percent of the fraudulent benefit overpayment. The amount required to be repaid to the department will be an amount equal to the fraudulent benefit overpayment plus the penalty.