Labor Dept. Reports $5 Billion in 'Improper' Unemployment Insurance Payments

Penny Starr | January 9, 2013 | 4:31pm EST
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Outside the U.s. Department of Labor in Washington, D.C. ( Starr)

( – The U.S. Labor Department's website includes a database that shows $5,159,629,434 in improper unemployment insurance payments for all 50 states, U.S. territories and the District of Columbia for the period July 1, 2011 to June 30, 2012.

The database also shows that 2.85 percent, or $1.28 billion, of the total unemployment insurance payments ($45.2 billion) in that timeframe were the result of fraud.  (See here and click on XLS sheet for “2012 Calendar Year data.”)

On the “browse by topic” section of the Department of Labor website is a link for “Unemployment Insurance” that takes visitors to the page devoted to that topic, including “Unemployment Insurance (UI) Improper Payments by State.”

Visitors who click on that link are taken to an interactive map where clicking on an individual state reveals the three-year rates of fraud and improper payment and recovery efforts on “established improper payments.”

Pennsylvania,  for example, has the highest estimated improper payments in 2012 at $715,477,925 and its three-year fraud rate is 5.07 percent. Vermont has the lowest estimated improper payments for 2012 at $4,302,876 and a 1.25 percent fraud rate.

An unemployment job fair. (AP)

On Pennsylvania’s page, the “established overpayments” total $92,346,078, with $36,403,144 or 39.69 percent of those overpayments recovered. Of the $2,630,815 “established overpayments” in Vermont, $806,844 or 47.58 percent was recovered.

Data for each state also included overpayments that have been waived, although no explanation is given and inquires to DOL were not answered. In Vermont, for example, the “overpayments waived,” totaled $935,160.

Information on improper payments also lists “root cause descriptions,” including “able and availability issues” (hospitalization or jail, etc.), “work search issues” (work search requirements not confirmed) and “claimant continues to claim and receive benefits after returning to work.”

As to the recovery of improper payments, the DOL includes a PDF explaining how the Department of Treasury is diverting tax-refund payments to recoup some of the lost capital.

(AP Photo)

The “Offsets Matter” document for the Treasury Offset Program (TOP) shows that since the program’s inception in 2011 more than $119.2 million has been collected through almost 100,000 offsets again Federal tax refund payments.  (See TOP Document.pdf )

The DOL outlines its “core strategies to reduce improper payments” and other actions it is taking to improve performance at the state level, including providing funding to the states.  (See TOP Document.pdf )

“On Sept. 27, 2012 the Department announced the award of approximately $169 million in supplemental budget requests (SBRs) to 33 states for projects related to program integrity and performance to address their root causes most likely to quickly reduce improper payments.”

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