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US government estimates $60 billion in unemployment fraud claims during pandemic

NerdWallet-COVID-Relief
Posted at 12:42 PM, Jan 24, 2023
and last updated 2023-01-24 14:42:05-05

More than $878 billion in unemployment insurance was paid out from March 2020 through September, but of that amount, up to $60 billion involved fraudulent claims, according to the Government Accountability Office.

In a GAO report released this week, the government said that $4.3 billion of expanded unemployment has been formally determined to be given away through fraudulent claims. An additional $45 billion of payments has indications of potential fraud. Federal officials say, however, this figure is not indicative of the extent of potential fraud.

There was also an estimated $8.5 billion in fraudulent claims from regular state unemployment insurance in 2021, the GAO said.

The GAO said it recommended the Department of Labor to “design and implement an antifraud strategy for UI based on a fraud risk profile consistent with leading practices as provided in the Fraud Risk Framework.”

For the first year of the pandemic, the federal government offered $600 per week in additional unemployment benefits in addition to state unemployment insurance. The benefits were also extended to those not traditionally given unemployment insurance, such as contract workers and substitute teachers.