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Report: Improper Jobless Benefit Payments Reach $14 Billion

By    |   Monday, 09 July 2012 02:35 PM

While most unemployment benefits paid out go to people in need, approximately $14 billion in unemployment benefits were overpaid by states and the federal government in fiscal 2011, CNNMoney reports.

This equaled approximately 11 percent of all the unemployment benefits that were paid out.

Indiana had the highest rate of improper payments (43.57 percent), followed by Louisiana (43.55 percent) and New Mexico (27.1 percent), while Kentucky (4.5 percent) had the lowest rate.

Most of the overpaid claims are paid to people with circumstances that make them ineligible for benefits, including those who are not actively seeking work, those who were fired or quit their job and those who file claims even though they have returned to work, according to CNNMoney.

The improper payments usually result from an administrative error on the part of the government, the employer, the beneficiary or a combination of the three.

People deliberately defrauding the system is rare. The most common defrauding schemes involve prison inmates, illegal immigrants and deceased people.

The Department of Labor estimates that approximately half of the improper payments are recoverable. However, only one-fourth of this estimate has actually been recovered historically, said Gay Gilbert, administrator of the Labor Department’s Office of Unemployment Insurance, CNNMoney reports.

Of the federal programs, the unemployment insurance program has the second highest rate of improper payments, behind the National School Lunch Program.

For the week ended June 30, seasonally adjusted initial unemployment claims were 374,000.

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Monday, 09 July 2012 02:35 PM
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