¶ OIG OVERSIGHT OF THE UNEMPLOYMENT INSURANCE PROGRAM

link to page

¶ BibTeX

@misc{UIoversightOIG,
  title={Oig Oversight Of The Unemployment Insurance Program},
  url={https://www.oig.dol.gov/doloiguioversightwork.htm},
  author={U.S. Department of Labor, Office of Inspector General.},
  year={2023},
}

last accessed 20231002, when page said “Page last updated June 08, 2023”

¶ Notes and Excerpts

Exact dates for FPUC are 2020 03 27 - 2020 07 31 and then 2020 12 28 - 2020 09 21

For more than 20 years, the OIG has reported on the Department’s challenges to measure, report, and reduce improper payments in the UI program, which has experienced some of the highest improper payment rates across the federal government. The reported improper payment rate estimate for the regular UI program has been above 10 percent for 15 of the last 19 years. In the last 2 years, ETA has estimated an improper payment rate of 18.71 percent and 21.52 percent, respectively. Further, ETA estimated a fraud rate of 8.57 for Program Year 2021, or a 170 percent increase over the prior year’s fraud rate.

Following the start of the pandemic in the United States in early 2020, unemployment compensation claims rose exponentially to historically unprecedented levels. Prior to the pandemic, numbers of UI claims were historically low. On March 14, 2020, the Department reported 282,000 initial unemployment claims. Within 2 to 3 weeks, initial unemployment claims rose to 10 times pre-pandemic levels, far higher than state systems were designed to handle.16 Within 5 months, through August 15, 2020, the Department reported 57.4 million initial claims, the largest increase since the Department began tracking UI data in 1967.

The CARES Act provided significant funding to the UI program, which resulted in hundreds of billions of dollars in additional payments. New UI programs under the CARES Act meant more workers qualified.17 Further, unemployed workers received a supplement per week in addition to their regular benefit amount, and individuals who exhausted their regular unemployment benefits were provided additional weeks of unemployment compensation. Also, certain UI claims could be backdated to the beginning of the eligibility period. With the legislative extensions, claimants could receive up to 79 weeks of pandemic-related UI paymen

The expanded coverage offered under the PUA program posed significant challenges to states as they implemented processes to determine initial and continued program eligibility for participants. The reliance solely on claimant self-certifications without evidence of eligibility and wages during the program’s first 9 months rendered the PUA program extremely susceptible to improper payments including fraud.

Note that “fraud” here mostly means identity theft type things, so I perhaps shouldn’t use that word when describing hesitance to return to work.

Estimating the overall improper payment rate for the pandemic UI programs is critical for the efficient operation of the program. ETA and the states, under their program operating responsibilities, must determine the improper payment rate, including the fraud rate, for pandemic UI programs. In August 2020, we recommended24 that ETA estimate the improper payment rate for pandemic UI programs. In December 2021, consistent with our recommendation, ETA reported an improper payment rate of 18.71 percent for 2021, which ETA applied to two of the three key pandemic UI programs, PEUC and FPUC. Additionally, in December 2022, ETA reported an improper payment rate of 21.52 percent, which it also applied to PEUC and FPUC … at least $191 billion in pandemic UI payments could have been improper payments, with a significant portion attributable to fraud. Further, for Program Year 2021, ETA estimated a fraud rate of 8.57 percent, which indicates over $76 billion was likely paid to fraudsters.

Based on our audit and investigative work, the improper payment rate for pandemic UI programs is likely higher than 21.52 percent. For example, ETA’s reported improper payment rate estimates have not included estimates for the PUA program.

Prior to the pandemic, the OIG opened approximately 100 UI investigative matters annually. Since April 1, 2020, the OIG has opened over 200,000 investigative matters concerning UI fraud. That is an increase of more than 1,000 times in the volume of UI work that we are facing. UI investigations now account for approximately 96 percent of the OIG investigative case inventory, compared to approximately 11 percent prior to the pandemic.