Gov't Doles Out $10.3 Billion in Improper Unemployment Payments – In 1Year

January 29, 2013 - 4:12 PM

currency

U.S. currency. (AP Photo)

(CNSNews.com) – The Federal-State Unemployment Insurance program paid out $10.3 billion in benefits in 2012 to people who should not have received the money, according to the Department of Labor (DOL).

The data provided on the government website, paymentaccuracy.gov, shows those payments amount to 11.42 percent of all the unemployment insurance checks handed out – an increase from 11.36 percent in 2011 and in excess of the government’s “target” for overpayments of 9.66 percent.

The DOL states that most of the data reported on its paymentaccuracy website was for the federal government’s fiscal year, which runs from Sept. 30 to Oct. 1, but that some data may have come from calendar year tabulations, which is why the department “used the term fiscal reporting year to best describe the time period in which the most current information was reported.”

The data also show that improper unemployment insurance payments increased steadily between 2009 and 2012, from 10.3 percent to 12 percent, respectively.

That percentage dropped 0.6 percent between 2011 (12 percent) and 2012 (11.4 percent), according to the DOL, which consequently forecasts that improper payments will fall below 10 percent in 2013 and 2014.

As reported by CNSNews.com, statistics released by DOL show that of the $10.3 billion in improper payments, the states improperly paid more than $5 billion for the period July 1, 2011 to June 30, 2012. (See  DOL spread sheet on states payments.xls )

The “program contents” portion of the website states that 70 percent of the $10.3 billion that was paid out in 2012 was done so through one of three scenarios: “individuals did not meet their active work search requirements, continued to claim UI benefits after they had returned to work, or were ineligible for benefits because they voluntarily quit their jobs or were discharged for misconduct.”

An estimated 2.85 percent of state and federal improper unemployment payments were the result of fraud, according to the DOL.

The government website states that unemployment “helps cushion the impact of economic downturns and brings economic stability to communities, states, and the nation by providing temporary income support for laid off workers.”

unemployment

(AP Photo)

The website also promotes the government’s efforts to end this trend.

“The reduction of improper payments in the UI program is a top priority of the Department of Labor,” the website states.

And the government is spending more money to that end.

“In fiscal year 2012 the Department awarded $169.9 million in supplemental funding to 33 states for the prevention, detection, and recovery of improper UI benefit payments; improve state performance; address outdated Information Technology (IT) system infrastructures necessary to improve UI program integrity; and enable states to expand or implement Reemployment and Eligibility Assessment (REA) programs,” the website states.