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The United States has overpaid more than $6.2 billion in unemployment benefits

By April 9, 2021No Comments

The United States overpaid more than $6.2 billion in government-funded unemployment benefits during the first year of the pandemic, according to a recently released report by the Government Accountability Office.

Between March 2020 and February 2021, the country erroneously distributed more than $3.6 billion in Pandemic Unemployment Assistance, the Labor Department reported. That’s in addition to $2.6 billion in regular unemployment insurance overpayments made in the last three quarters of 2020, according to the Washington Post. 

For background: the PUA program temporarily expanded UI eligibility to self-employed workers, freelancers, independent contractors, and part-time workers impacted by the pandemic. 

But since its inception, the hastily conceived program was incapacitated by an unprecedented number of legitimate claims filed by millions of newly unemployed Americans, as well as fraudulent unemployment claims filed by criminals around the globe. 

Over the course of the last year,  thousands of jobless workers were notified that they were overpaid, typically due to administrative errors, and were responsible for paying back up to thousands of dollars in payments.

“Because states focused, rightly, on processing old claims, it took a while for states to identify overpayment, so once they get there it’s been months and so people have gotten overpayments for a very long time,” Senior Researcher Michele Evermore told CBS 58 News in Milwaukee. 

In Louisiana, an audit of the state’s Workforce Commission found that more than $400 million in unemployment benefits were distributed to 97,000 people who “shouldn’t have been able to claim unemployment.” 

In March, the State of Ohio, which paid out hundreds of millions of dollars in fraudulent UI claims through the PUA program (For context: 1 in 5 PUA claimants in Ohio received an overpayment between March and August,) asked President Joe Biden to help combat unemployment fraud. Meanwhile, Texas officials are seeking to recoup $214 million from 260,000 claimants, while Virginia accidentally overpaid 35,000 PUA applicants in the first months of the pandemic. 

Imposter claims, whereby criminals use stolen personal information to file fraudulent claims, likely account for a portion of the overpayments made. As of November 2020, scammers from around the globe have collected $36 billion in CARES Act unemployment benefits. The GUA report noted that “overpayments are not necessarily a result of fraud, though some may be.” 

The figures in the latest GAO report are significantly higher than originally believed. In a January report, the GAO found that Labor Department Data showed $1.1 billion in PUA overpayments between March and December 2020. 

“While the DOL has taken some steps to collect data on states’ efforts to recover overpayments, we found that the data being used does not include information about overpayments that have been waived rather than collected by states,” the GAO said.  “As a result, it’s unclear how much states will or will not recover. We are now recommending that DOL collect this data.”


ABOUT THE AUTHOR

Lia Tabackman is a freelance journalist, copywriter, and social media strategist based in Richmond, Virginia. Her writing has appeared in the Washington Post, CBS 6 News, the Los Angeles Times, and Arlington Magazine, among others.

(Image by S K from Pixabay)

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