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  • Writer's pictureBy The Financial District

COVID Unemployment Insurance Fraud Estimated To Reach $135 Billion

A recent report by a federal watchdog agency suggests that hundreds of billions of dollars in unemployment insurance (UI) payments distributed during the COVID-19 pandemic may have been fraudulent.

The amount of fraud in unemployment insurance (UI) programs during the COVID-19 pandemic likely ranged from $100 billion to $135 billion.

However, the report acknowledges that the "full extent" of this fraud remains uncertain, Naveen Athrappully reported for the Epoch Times.

In response to the significant job losses during the pandemic, Congress introduced new temporary unemployment insurance programs to offer relief to those who had lost their jobs at the time.

Nevertheless, the US Government Accountability Office (GAO) stated in its September 12 report that the "unprecedented demand for benefits and the need for rapid implementation of these new programs increased the risk of fraud."

The GAO estimates that "the amount of fraud in unemployment insurance (UI) programs during the COVID-19 pandemic likely ranged from $100 billion to $135 billion. This represents approximately 11% to 15% of the total UI benefits disbursed during the pandemic."

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The agency also pointed out that "the complete extent of UI fraud during the pandemic is likely to remain uncertain."

This estimate encompasses the period from April 2020, when the first full month of UI program payments commenced, to May 2023, which marked the conclusion of the COVID-19 public health emergency.

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Due to the risk of fraud and other challenges, the GAO included the UI system on its High-Risk List in June of the previous year.

The High-Risk List is updated at the start of each new Congress and identifies government programs and operations that are "vulnerable to waste, fraud, abuse, or mismanagement, or require transformation."

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In a draft of the report, the Department of Labor raised doubts about the GAO's methodology and suggested that the resulting estimates were likely exaggerated. However, the GAO dismissed these concerns, asserting that it had taken rigorous measures to determine the range of fraud.

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