Tens of Millions of Dollars in Jobless Claims Paid to the Dead

By Unemployment-Extension.org | April 20, 2015 at 9:43 PM |

When the extended unemployment benefits program expired at the end of 2013, it left many unemployed individuals with no financial recourse. To date, despite attempts to revive the EUC program, those long-term unemployed still remain ineligible to receive jobless benefits.

Submit Unemployment Extension Claim.

States Found to Make Overpayments in Unemployment Benefits

Yet, at the same time, new reports have recently surfaced indicating that state employees, prisoners, and even the dead have received jobless benefits in at least one state. In spite of multiple warnings that the state of Tennessee has overpaid millions of dollars in unemployment benefits, the state has continued to issue such benefits.

Those claims recently emerged following an audit conducted by the state comptroller's office that indicated that overpayments in the amount of $98 million have been made over the course of the past six years. The audit concluded that a backlog of payments could cause that figure to soar to $171 million. According to the Department of Labor and Workforce Development of Tennessee, overpayments in the amount of $165 million were made during that period. The Department went on to state that $71.5 million of the improper payments has been collected.

Unemployment Insurance Fraud and Waste (Historical & Projected) in April 2015

It happens not the first time that states have been accused of overpaying unemployment benefits or improperly paying jobless benefits to individuals. Recently, a study was released by the St. Louis Federal Reserve indicating that $108 billion was paid out in 2011 in improper unemployment benefits.

Another audit conducted by the North Carolina Department of Commerce's Division of Employment Security found that the State of North Carolina overpaid approximately $50 million in jobless benefits, according to Triangle Business Journal. Those overpayments were made in more than 54,000 cases.

The audit concluded that as many as 25% of those cases may not have required documentation. The review, which covered a period between 2013 and 2014, included an investigation of more than 61,000 cases. Overpayments were found to have been made in almost 90% of cases. Auditors found that in some instances, documentation could not be located in order to verify whether the investigation was sufficient and that the proper determination was reached.

In response to the audit, the Department of Commerce stated that moving forward it would be maintaining a tracking/reporting process that would make it possible for investigators to upload documents electronically.

Effect of Overpayments on the Long-Term Unemployed

Undoubtedly, overpayments of unemployment benefits and even payments of benefits to individuals who are no longer living can result in significant problems. Not only do such overpayments erode public trust, but they also put state coffers at risk. For the many long-term unemployed who have continued to struggle since the EUC program came to an end in 2013, such overpayments may seem like a slap in the face.

While the number of people who have been unemployed for six months or more declined by more than 1 million last year, almost 3 million people who are considered long-term unemployed remain. Unemployed for over 27 weeks still represent approximately 30% of the total amount of unemployed individuals in the United States.

Among the many and varied reasons that the percentage of long-term unemployed is much larger than in previous recessions is the fact that during the Great Recession, workers were affected in a completely indiscriminate manner. Both skilled and unskilled workers were affected, and many workers, regardless of skill, found it difficult to bounce back.

Even the possession of a college degree was not sufficient to prevent workers from suffering from the effects of long-term unemployment. College graduates and individuals with only a high-school diploma were equally likely to be out of work for more than 27 weeks.

Preceding to the Great Recession, the number of long-term unemployed tended to range between 10% and 20% of the total number of unemployed. When the Great Recession hit, however, that number reached as high as 45%.

With no extension in sight for long-term unemployment benefits, jobless workers still reeling from the effects of the recession may be left to wonder whether they have been all but forgotten.

Other Unemployment News

Unemployment Linked to Mental Health Problems

More States Cutting Unemployment Benefits as Jobless Claims Edge Upward

More News