Report: Gov’t Overpaid $14B in Unemployment Benefits
- Posted on July 9, 2012 at 1:17pm by
Becket Adams
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You read that correctly: the feds and state governments overpaid approximately $14 billion in unemployment benefits last year, according to the U.S. Labor Department and CNN Money.
“Now, the U.S. Department of Labor and the states are in the midst of a massive effort to try to recoup some of their lost funds and avoid future overpayments,” writes Annalyn Censky for CNN Money.
So, um, where did all that cash go and how do the feds and state governments plan on getting it back? Let’s start with the first question.
Overpaid funds usually “end up in the hands of three types of people: Those who aren’t actively searching for a job, those who were fired or quit voluntarily, and those who continue to file claims even though they’ve returned to work,” Censky reports, adding that overpayments “typically [result] from an administrative error made either by the government, the employer, the worker or a combination of the three.”
But let’s not rule out the obvious: fraud.
For instance, Ryan Greminger of Richmond, Ind. collected unemployment benefits while serving two years in a county jail!
“It’s not like some big scheme I thought of,” he said.
After being laid off in 2007, Greminger was on unemployment legitimately. However, once he landed in jail for drug-related crimes, a fellow inmate convinced him to keep filing the claims. So he did.
“I paid this guy $50 each time to have his girlfriend — a woman I had never met — file my unemployment claims,” he said.
He’s out of prison now and owes the state about $14,000.
“I accept responsibility for what I did. It was wrong. It was a mistake,” he said. “I’m paying for it now.”
So let’s answer the second question: how do states and the feds plan on recovering all this overpaid cash?
Amazingly enough, Vice President Joe Biden has been put in charge of leading the Campaign to Cut Waste, an initiative aimed specifically at stopping the feds from overpaying themselves.
Biden? Really?
“Unemployment checks are going to people in prison. Unemployment checks are going to graveyards,” Biden said in September.
According to the Labor Department, about half of its overpayments can be recovered, but for some reason it never manages to recoup that much.
“Historically, only about a quarter of the estimated ‘recoverable’ overpayments have actually been recovered,” Gay Gilbert, administrator in the Labor Department’s Office of Unemployment Insurance, tells CNN Money.
But she also believes “preventative measures” are having an effect.
“We believe our improper payment rate has very slightly started to tick down,” Gilbert said.
What happens when government agencies discover someone has been overpaid?
“When the government finds someone was overpaid, it often issues a letter asking the claimant to return the extra funds. In some states, workers can have repayment waived, if they‘re in financial distress and can prove the error wasn’t intentional,” Censky reports.
“In other cases, government attorneys can take claimants to court if they don’t pay back what they owe. They have various methods of recouping the money, including setting up payment plans, garnishing wages or deducting funds from federal income tax returns,” she adds.
Of course, when all else fails and the recipient of an overpayments is found to be guilty of fraud, punishments can include probation, community service, and paying back the cash with additional penalties tacked on.
“In fiscal 2011, there were roughly 2,700 convictions for fraud related to unemployment insurance,” the report adds.
This story has been updated.
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Comments (51)
762x51
Posted on July 9, 2012 at 8:01pmSo the same government running healthcare should pose no problem at all.
Talk about ignorant arrogance
Report Post »lukerw
Posted on July 9, 2012 at 8:22pmThe DOOMSDAY Machine is running PERFECTLY!
Report Post »Tigertame4
Posted on July 9, 2012 at 7:30pmI don’t know why the liberals are upset. Why do people have to be seeking employment or even prove they ever worked. Given their logic for voting, ANYONE should be able to collect unemployment. Having to show proof discriminates against the lazy.
Report Post »Mr Sanders
Posted on July 9, 2012 at 7:28pm44 hours lost on the debtclock…. or better yet…. why did we spend it?
so far I count 290B spent needlessly based on past stories….. but I‘m sure its okay to either spend money they don’t have or US taxpayers’ money, right?!
“these things happen” – now where is my cake?!
Report Post »FANGS
Posted on July 9, 2012 at 6:30pmIt’s way past time to wipe this entire democrat party out.
Report Post »db321
Posted on July 9, 2012 at 7:00pmYea, that was Unemployment. Govt will be much better at running Heath Care.
Report Post »South Philly Boy
Posted on July 9, 2012 at 5:31pmAnd they want to RUN NATIONAL HEALTHCARE
Report Post »Free2speakRN
Posted on July 9, 2012 at 10:06pmThey want to run ‘us’!
Report Post »illinioshoj
Posted on July 9, 2012 at 5:28pmReally?Only 14 billion did they count themselves?That‘s another 100 billion in people who don’t work either!
Report Post »alrunner58
Posted on July 9, 2012 at 5:00pmThe government never ceases to amaze me.
Report Post »SanDiegoCountyCitizen
Posted on July 9, 2012 at 3:54pmComplete incompetence. time to replace the federal government with a limited constitutionalism republic, as the current government has no constitutional or legal right to existent.
Report Post »KeithOlberdink
Posted on July 9, 2012 at 3:45pmYou can bet if the gov’t says 14 b, it’s more like 28 b
Report Post »REPUB1
Posted on July 9, 2012 at 6:01pmGood One!!!!!!!
Report Post »The-Monk
Posted on July 9, 2012 at 3:07pmIt‘s Bush’s fault….
Report Post »AJAYW
Posted on July 9, 2012 at 2:46pmWith all this money disappearing – we need to start looking for off shore account set-up in obama’s kids names
Report Post »disgustedandappalled
Posted on July 9, 2012 at 2:43pmOh gee, how did that happen……
Report Post »IMCHRISTIAN
Posted on July 9, 2012 at 1:54pmWatch who you vote for…………..If they can’t budget they are worthless…If they play favorites they are worthless…If they hate America they are worthless….If they don’t know how to run their departments responsibly they are worthless…. If they lie, cheat or are bigots they are worthless. If they try to have class warfare and are show bigotry they are worthless. …… So watch who you vote for wisely ….
Report Post »god Bless America.
rickc34
Posted on July 9, 2012 at 2:40pmAnd now they want to take over healthcare, Biden looks like the Prozac poster boy.
Report Post »Detroit paperboy
Posted on July 9, 2012 at 1:53pmWho cares, its just monopoly money…….
Report Post »WillG
Posted on July 9, 2012 at 2:14pmYou nailed it! Invest in something with real value before it is too late.
Report Post »blanco5
Posted on July 9, 2012 at 1:47pmRemember when “billions” used to have more shock value? Me neither.
Report Post »hatchetjob
Posted on July 9, 2012 at 1:45pmWhat a sad country this has turned into. There are people who need to be in jail and STAY there. The guy in jail drawing unemployment checks said he made “a mistake”…… do ya think????? He needs to stay in jail.
Report Post »Al J Zira
Posted on July 9, 2012 at 1:37pmSo the economy should be roaring by now. There’s $14B extra dollars in unemployment benefits that Nancy says is the best way to stimulate the economy along with food stamps. God knows there’s billion wasted in the food stamp program, I‘m just wondering why retail hasn’t improved with all that extra cash.
Report Post »biohazard23
Posted on July 9, 2012 at 1:58pmSure it has. Only problem is they’ve been buying Lucky Strikes, 4Loco, and prescriptions from unlicensed pharmacists.
Report Post »SpankDaMonkey
Posted on July 9, 2012 at 1:34pm.
Report Post »$14B Damn I need to get me one of those Wellfare Queen jobs…..
hatchetjob
Posted on July 9, 2012 at 1:48pmThe IRS is foaming at the mouth to get that money back too.
Report Post »Iamnotanumber
Posted on July 9, 2012 at 3:46pmFor some reason I think they’d rather come for Joe Average getting it done to get a Grand than retrieve a billion from the bottom feeding thieves.
Report Post »knockered
Posted on July 9, 2012 at 1:31pmJust another example of how they will handle our healthcare. The government has never gotten it right and never will. Scary isn’t it. Only thing left is for the people to get involved with everything these idiots do and try to straighten it out. Good luck with that.
Report Post »Midwest Blonde
Posted on July 9, 2012 at 1:29pmYeah it’s easy to file a fraudulent claim. NO I’ve never done it but…. it‘s all done by phone now and there’s no real way to verify who’s making the call and pushing buttons to file. No human, just phones and computers.
Report Post »huey6367
Posted on July 9, 2012 at 1:26pmOh yeah, nice pic there Joe. You look like the crazy person you are.
Report Post »EqualJustice
Posted on July 9, 2012 at 1:26pmOh, great, now let’s hand them control over our entire health care system, since they do such a WONDERFUL job of oversight. I predict this will be just ANOTHER reason to HIRE more IRS agents in the future, to oversee the overseers? Sickening mess! Waste and fraud is all we will ever get from the federal gov’t. Back to letting the STATES keep their own funds and sending minimal amounts to the feds for only what they are supposed to be doing, according to the Constituion
Report Post »MAMMY_NUNN
Posted on July 9, 2012 at 1:58pmTaxes levied are never spent on the intended purpose it will never end unless we have secured accounts again.
Report Post »objectivetruth
Posted on July 10, 2012 at 9:38amGood luck with more agents.You have no idea how many quit within a few years do you?The irs has to follow the treasury.The treasury is controlled by CONGRESS.Folks there are people all over the government who can’t speak out publicly.They are as fed up as you are if not more.I forsee a day where no government agency can get anyone to work for them.It isn’t as far away as you think either.
Report Post »huey6367
Posted on July 9, 2012 at 1:25pmThey aren’t capable of governing or watching the flow of money and we trust them with healthcare?
Really?
Report Post »CatB
Posted on July 9, 2012 at 1:34pmThat is why it must be repealed .. YOUR LIFE DEPENDS ON IT!
Report Post »huey6367
Posted on July 9, 2012 at 2:47pmWay ahead of ya on that
Report Post »Gonzo
Posted on July 9, 2012 at 1:23pmA couple billion here, a couple billion there…chicken feed to these spendaholics.
Report Post »Steelheadisadouche
Posted on July 9, 2012 at 1:48pmToo bad they didn’t accidently use it on the border-or hell, even accidently to shore up the Postal Service.
Report Post »drbage
Posted on July 9, 2012 at 2:20pmA couple of billion–hey, maybe that’s why the Obummers decided not to go to the Vineyahd this year!
Report Post »Gonzo
Posted on July 9, 2012 at 3:11pmNo DR, they just didn‘t think throwing insults from ’The Vineyard‘ about Romney’s vacation would look good. They’ll more than make up for it over the next four years if he gets reelected.
Report Post »The_Jerk
Posted on July 9, 2012 at 1:23pmUnemployment benefits must stop at six months, period. Then, if support is still needed, call it what it is, welfare handouts.
Report Post »Gonzo
Posted on July 9, 2012 at 1:34pmAgreed.
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