4/29/2013

Fraud in Unemployment Insurance System

The St. Louis Federal Reserve has released a study showing $3.3 billion was made in over payments for unemployment insurance.  It seems to me that this is just one type of fraud, not the type where people are lying about whether they are eligible and that all the information is properly reported.  Identity fraud might also be occurring.  With all the concern of the $44 billion in budget cuts from the sequester, this one type of fraud in one program equals almost one percent of those cuts.  You would think that this would get some attention.  From the St. Louis Fed:
The unemployment insurance program in the U.S. offers benefits to workers if they lose their jobs through no fault of their own. In 2011, this program cost $108 billion, of which nearly $3.3 billion was spent on overpayments due to fraud. 
Unemployment insurance fraud occurs when an ineligible individual collects benefits after intentionally misreporting his or her eligibility. Recent headlines have brought attention to extreme forms of fraud, such as the collection of unemployment benefits by prisoners. The dominant form of unemployment insurance fraud, however, is what's called concealed earnings fraud. This fraud occurs when individuals collect unemployment benefits while they are employed and are earning wages. The overpayments due to concealed earnings accounted for almost $2.2 billion in 2011, two-thirds of the total overpayments due to all categories of fraud. . . .

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