US jobless aid programs bilked of up to $135 billion during COVID, watchdog says
The GAO's fraud estimate is around two times or more higher than the nearly $56 billion it said states themselves have estimated paying in either fraudulent payments or nonfraudulent overpayments between March 2020 and March 2023.
Up to $135 billion of jobless benefits paid out by U.S. states during the coronavirus pandemic may have arisen from fraudulent claims, Washington's top government watchdog said on Tuesday in a report suggesting the problem is much bigger than previously estimated. Waves of fraudulent claims for unemployment insurance benefits have episodically inflated the volumes of new filings reported each week to the Labor Department by all 50 states, the District of Columbia, Puerto Rico and the U.S. Virgin Islands, often confounding economists tracking the data for a read on the health of the job market.
But a new General Accountability Office report estimates the problem is much bigger: Between $100 billion and $135 billion of the roughly $900 billion in jobless benefits payouts from April 2020 through May 2023 may have been fraudulent. At the high end, that would equal about $1 of every $7 paid in aid over that time.
The GAO's fraud estimate is around two times or more higher than the nearly $56 billion it said states themselves have estimated paying in either fraudulent payments or nonfraudulent overpayments between March 2020 and March 2023.
But a new General Accountability Office report estimates the problem is much bigger: Between $100 billion and $135 billion of the roughly $900 billion in jobless benefits payouts from April 2020 through May 2023 may have been fraudulent. At the high end, that would equal about $1 of every $7 paid in aid over that time.
The GAO's fraud estimate is around two times or higher than the nearly $56 billion it said states themselves have estimated paying in either fraudulent payments or nonfraudulent overpayments between March 2020 and March 2023.
"For this reason, the Department believes that the GAO's report overestimates the level of fraud and that this report can best be understood as an estimate of UI fraud risk rather than a fraud estimate," Brent Parton, the department's principal deputy assistant secretary, wrote to the GAO investigators.
Fraudulent claims activity has periodically distorted the data reported weekly by the Labor Department, befuddling economists who count on the data for gauging the wherewithal of the job market.
In early May a surge in new benefits claims to the highest level since October 2021 briefly led economists to conclude a long-awaited softening in the labor market was taking hold. The increase soon afterwards was attributed almost entirely to a wave of fraudulent claims in Massachusetts, and the initial estimate of claims for that period was later revised down by 32,000, or more than 12 per cent.
Another short-lived increase in new claims in August was seen by some economists as related to an increase in fraudulent claims activity in Ohio.
Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.
RECOMMENDED STORIES
EPFO Pension Schemes: Early pension, retirement pension, nominee pension and 4 other pension schemes that every private sector employee should know
Gratuity Calculator: Rs 38,000 as last-drawn basic salary, 5 years and 5 months of service; what will be gratuity amount?
SBI 5-Year FD vs MIS: Which can offer higher returns on a Rs 2,00,000 investment over 5 years? See calculations
Senior Citizen Latest FD Rates: Know what major banks like SBI, PNB, Canara Bank, HDFC Bank, ICICI Bank are providing on fixed deposits
11:57 AM IST