People Making Over $100K Received Unemployment Benefits in 2011, Media Mum
With all the media panic about sequestration, one would think a study finding billions of dollars of fraud in a government program would be national news.
Apparently not, for with few exceptions, a report published by the St. Louis Federal Reserve last week finding $3.3 billion in fraudulent unemployment claims in 2011 got almost no attention:
The unemployment insurance program in the U.S. offers benefits to workers if they lose their jobs through no fault of their own. In 2011, this program cost $108 billion, of which nearly $3.3 billion was spent on overpayments due to fraud.
Unemployment insurance fraud occurs when an ineligible individual collects benefits after intentionally misreporting his or her eligibility. Recent headlines have brought attention to extreme forms of fraud, such as the collection of unemployment benefits by prisoners. The dominant form of unemployment insurance fraud, however, is what’s called concealed earnings fraud. This fraud occurs when individuals collect unemployment benefits while they are employed and are earning wages. The overpayments due to concealed earnings accounted for almost $2.2 billion in 2011, two-thirds of the total overpayments due to all categories of fraud. […]
Among those committing concealed earnings fraud, 18,000 (roughly 20 percent) earned less than $300 per week, and 12,000 (14 percent) earned more than $900 per week.
$900 a week is almost $47,000 per year. That’s roughly the same as median household income in 2011.
And, according to the study, fraud by folks making more than $900 a week accounted for 22 percent of the overpayments in 2011.
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