By Brett Rowland (The Main Square)
The U.S. government estimates that unemployment fraud during the pandemic has cost taxpayers up to $135 billion, or about 11% to 15% of the total amount of unemployment benefits paid during the pandemic.
This is evident from the latest report from the US Government Accountability Office, which is disputed by the US Department of Labor.
“The full extent of [unemployment insurance] fraud during the pandemic will likely never be known with certainty,” the report said.
The Department of Labor disagreed with the Government Accountability Office’s fraud estimate, saying it was likely exaggerated. However, the Government Accountability Office disagreed.
“The unprecedented demand for UI benefits and the need to quickly implement the new programs during the pandemic increased the risk of fraud,” the report said. “The increased importance of the UI system during the pandemic drew attention to its vulnerabilities and susceptibility to fraud, waste, abuse and mismanagement.”
U.S. Senate Finance Committee Ranking Member Mike Crapo, R-Idaho, said more needs to be done to prevent fraud.
“These shocking estimates continue to grow, and, as GAO notes, we may never know the full extent and scope of fraudulent pandemic payments,” he said in a statement. “Congress should pass the Protecting Taxpayers and Victims of Unemployment Fraud Act to recover stolen money for victims and prevent similar large-scale theft in the future.”
U.S. House Ways and Means Chairman Jason Smith, R-Missouri, said the fraud is hurting working families.
“I am extremely alarmed by these findings and even more convinced that immediate action is needed to recover as much taxpayer money as possible,” Smith said in a statement. “Unemployment fraud punishes workers and families by taking resources away from law-abiding Americans who deserve relief and putting those resources directly into the pockets of criminals.”
Related: Felon under house arrest used cases to fraudulently apply for pandemic relief
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According to the Department of Labor, spending across the UI system totaled approximately $900 billion between April 1, 2020 and May 31, 2023. That includes approximately $230 billion under the regular UI and Expanded Benefits programs and approximately $670 billion under the pandemic UI programs that expired on September 6, 2021. Twenty-four states ended their participation in at least one of the pandemic UI programs before the programs. expired.
According to the Government Accountability Office, states have reported recovering approximately $1.2 billion in fraudulent overpayments as of May 1, 2023.
The Act to Protect Taxpayers and Victims of Unemployment Fraud would push states to recover overpayments. The measure would allow states to retain 25% of all fraudulent overpayments recovered. Under the bill, that money could be used to modernize unemployment compensation systems and information technology, reimburse administrative costs, hire fraud investigators and prosecutors, and for other program integrity activities. Additionally, the bill allows states to withhold 5% of any overpayments of regular and extended unemployment benefits. To keep these overpayments, a state must certify that it has met certain data matching requirements. The bill also gives states more time to recover overpayments by extending the deadline for pandemic unemployment benefits from 3 to 10 years.
Related: Watchdogs say unemployment fraud likely reached $191 billion
President Joe Biden has said he will veto the bill if it reaches his desk.
“Contrary to its stated purpose, this bill would strip state unemployment insurance programs of essential resources to combat fraud, combat identity theft, and recover overpayments, and would defeat the goals of strengthening program integrity and combating reduce systemic fraud,” a statement said. of management policy. “The bill would halt work to modernize legacy UI systems in states across the country, undermining efforts to detect and deter fraud and improve identity verification and cybersecurity, while providing a timely, fair and accurate distribution of benefits to eligible employees is ensured.”
Syndicated with permission from The Center Square.