At least $60 billion in fraudulent unemployment insurance benefits paid during Covid-19 pandemic.
The US Government Accountability Office (GAO) released a report on Monday which estimated that more than $60 billion in fraudulent unemployment insurance benefits may have been paid out during the Covid-19 pandemic. At least $4.3 billion in jobless benefits fraud has been formally determined by state unemployment agencies, while at least $45 billion in payments have been flagged for potential fraud by the US Department of Labor’s Office of Inspector General. The report comes a week before newly in power House Republicans plan to launch their first investigation into fraud in pandemic assistance efforts.
The Department of Labor has taken steps to address fraud risks, including issuing guidance, providing funding to states and deploying teams to recommend improvements to state unemployment insurance programs. But the office described the approach as “ad hoc” and the department has yet to develop an anti-fraud strategy based on GAO’s Fraud Risk Framework and to address six recommendations the office made in October 2021.
The Department of Labor’s Office of Inspector General released a report in September which estimated that $45.6 billion in pandemic unemployment benefits may have been fraudulently paid in four high-risk areas between March 2020 and April 2022. In its semiannual report to Congress in 2021, the inspector general’s office said that at least $87 billion in jobless benefits may have been paid improperly, with a significant portion due to fraud.
Congress enacted a historic expansion of the unemployment program to help Americans deal with the economic upheaval sparked by the Covid-19 pandemic in March 2020. States and Congress subsequently tightened their verification requirements in an attempt to combat the fraud. This included a federal weekly supplement for out-of-work Americans which provided a $600-a-week boost from April through July of 2020 and was later revived in December 2020 but reduced to $300 a week. Additionally, two other major measures were created to aid the jobless; the Pandemic Unemployment Assistance program and the Pandemic Emergency Unemployment Compensation program.
The GAO report and the Department of Labor’s Office of Inspector General report provide insight into the numerous schemes to steal money from a range of hastily implemented pandemic relief programs. The Department of Labor has taken steps to address fraud risks, but more needs to be done to ensure that taxpayer dollars are being spent appropriately. The House Oversight Committee is set to hold a hearing on the issue in February 2021, and it is important that lawmakers continue to investigate and take action to ensure that fraudulent payments are not made going forward.
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