States spent nearly $ 13 billion on unemployment, government watchdog says

State unemployment programs overpaid benefits by $ 12.9 billion during the first year of the pandemic after unemployment benefits were extended to cover more workers, new government accountability office says report. About $ 1.3 billion has been documented as fraud, according to the analysis.

As the pandemic shut down the economy in March 2020, lawmakers approved several new unemployment programs to help the millions of people who have suddenly lost their jobs, including workers who are traditionally not covered by unemployment assistance. unemployment, such as freelancers and concert workers. Most of the overpayments were made through the program for concert workers, known as the Pandemic Unemployment Assistance Program (PUA), according to the analysis.

The $ 12.9 billion is only a fraction of the more than 700 billion dollars in unemployment benefits spent since the start of the pandemic, but the problem highlights the complexity of the programs that have been created to quickly get help out of the pockets of unemployed Americans. Some states are now trying to get the return funds workers who they say have been overpaid, although so far only $ 300 million of those funds have been recovered, according to the GAO report.

Some states have known for months that they may have overpaid certain claims, along with Ohio, Pennsylvania, and other states. reach thousands of residents last fall to claim the refund.

The overpayment may be due to “an agency error or confusion on the part of the claimant,” Jenna Gerry, senior counsel for the National Employment Law Project, said of the long-standing overpayment issue before the publication of the report. Sometimes workers “inadvertently give out potentially wrong information and then the agency is like, ‘Oh, that’s actually a mistake, you have to return all that money.’ “

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The report comes as the ranks of America’s unemployed remain high, with 7 million fewer people on the payroll today than there was before the pandemic. Many unemployed Americans are reluctant to return to work, with around 1.6 million people saying they had not looked for work in June for fear of contracting the virus, while others are struggling school and daycare.

Meanwhile, the governors of 25 states recently ended pandemic unemployment programs, saying there were plenty of jobs available and the extra help was keeping workers on the sidelines. Louisiana has said it could exit the programs at the end of this month, while other states will end the enhanced benefits when federal funding expires in early September.

The GAO report looked at the first year of several new unemployment programs, from April 2020 to March 2021.

Fraud issues

Although the report identified $ 1.3 billion as linked to fraud, that number could increase, according to the analysis.

“States do not report these overpayments until investigations are completed and fraud has been established, which can take a long time,” the report said. “As a result, it is likely that states and territories have yet to report substantial amounts of fraudulent overpayments, which could contribute to the increase in reported amounts in the coming months.”

Pandemic unemployment programs have focused on three main areas: providing support to the self-employed and self-employed through the PUA program, creating additional weeks of support for the long-term unemployed (called PEUC), and paying an additional $ 300 in weekly services via the FPUC program.

The report found that the largest amount of overpayments, $ 4.6 billion, was related to the PUA program, followed by regular unemployment and extended benefit programs, at $ 4.3 billion. (The Extended Benefits program, which is triggered when unemployment rates are high, offers up to 13 additional weeks of unemployment assistance.) An additional $ 3.8 billion was overpaid through the FPUC program, while that about $ 200 million was overpaid through PEUC, according to the report.

Total overpayments may also increase, the GAO warned.

“These amounts are likely to increase as states focus on implementing programs and clearing backlog of claims to identify overpayments, according to DOL officials,” the analysis notes. .

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