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Up to $135B in unemployment aid stolen during pandemic: watchdog

The U.S. Government Accountability Office (GAO) estimated that the amount of unemployment insurance (UI) fraud during the pandemic is likely between $100 billion and $135 billion, according to a report released Tuesday. 

The GAO report tracked the approximately $900 billion in UI expenditures from April 1, 2020, to May 31, 2023, which marked the official end of the public health emergency. The estimated fraud would account for about 11 percent to 15 percent of the total UI benefits during the pandemic. 

During that same period of time, states reported finding about $55.8 billion in overpayments, about $5.3 billion of which were fraudulent, according to the report. States reported recovering about $6.8 billion, about $1.2 billion were fraudulent. 

“The unprecedented demand for UI benefits and the urgency with which states implemented the new programs during the pandemic increased the risk of improper payments, including, but not limited to, those due to fraud,” according to the report. 

Pandemic fraud has long been a concern, as many experts and government officials acknowledged the speed with which agencies had to act to respond to the global pandemic. 

This report, however, marks an increase in the GAO’s estimated UI fraud compared with previous reports. In December 2022, the GAO estimated that at least $60 billion in fraudulent payments “were made to claimants by extrapolating the lower bound of DOL’s 2021 estimated national fraud rate for the regular UI program to total UI spending.” At the time, the GAO concluded that the rate “could be substantially higher” than the $60 billion lower limit. 

“We now estimate that the amount of fraud was higher, with our new range of $100 billion to $135 billion falling above the lower limit that we reported in December 2022,” according to the GAO report. 

“To calculate our previous lower limit, we relied on existing evidence about the extent of fraud in the UI programs. Our current range extended this work through a substantial methodology employing independent sampling and modeling work,” the report continued. 

The GAO reported that the Department of Labor (DOL) “expressed concerns” about the fraud estimation methodology used in the report and “and stated that the resulting estimate was likely overstated.” The GAO pushed back against the department’s assessment and laid out in detail the process of estimating the fraud range. 

Source: The Hill

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