Overpaid unemployment benefits top $14 billion

by CNN MONEY July 9, 2012

Don't spend that unemployment check too fast. The government might ask you to pay it back.

Overpayments are a rampant problem in the unemployment insurance system. The federal government and states overpaid an estimated $14 billion in benefits in fiscal 2011, or roughly 11% of all the jobless benefits paid out, according to reports from the U.S. Labor Department.

Of the states, Indiana was the worst offender, making more improper payments than it did correct ones.

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.

Where does the money go?

The vast majority of unemployment benefits do go to people in need. In 2010 alone they helped keep 3.2 million Americans out of poverty, according to the Census Bureau.

But of the overpaid funds, most 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. Any of those circumstances would make a person ineligible for benefits.

The overpayment typically results from an administrative error made either by the government, the employer, the worker or a combination of the three.

Related: 8 unemployment scams

In much rarer situations, people deliberately defraud the system, using fake documents or identities. Common scams involve prison inmates, illegal immigrants or even the deceased.

Ryan Greminger, 36, of Richmond, Ind. collected unemployment benefits while serving two years in a county jail for a drug-related crime.

"It's not like some big scheme I thought of," he said. Greminger had been laid off from a factory in 2007 and was originally collecting unemployment benefits legally. After he landed in jail, another inmate urged him to keep filing the claims.

"I paid this guy $50 each time to have his girlfriend -- a woman I had never met -- file my unemployment claims."

Greminger said he knew it was wrong at the time, but he went along with the plan because he needed child support money for his fiancé and their four kids. Out of prison now, he's currently working to repay more than $14,000 to the state.

"I accept responsibility for what I did. It was wrong. It was a mistake," he said. "I'm paying for it now."

FINISH

 


blog comments powered by Disqus

10 year FSM Anniversary

Democrats who are set to skip Netanyahu speech are outraged over ad attacking Susan Rice on human rights

March 01, 2015  04:58 PM

And just where is the concern when it comes to Netanyahu's speech?

Mask wearing Code Pinkos attempt to shut down AIPAC 2015 [pics, video]

March 01, 2015  04:39 PM

"From the river to the sea Palestine will be free!"

'Moronic naïve' Sen. Chuck Schumer somehow finds a way to tie the NRA to homegrown terrorism

March 01, 2015  03:44 PM

"Do u know how stupid that sounds?"

'Look up irony in the dictionary': Harry Reid's communications director blasts GOP for wanting to 'change the rules'

March 01, 2015  03:06 PM

"You Jackasses are the ones who moved the goalposts every day."

Netanyahu 'deeply and genuinely concerned' as he leaves on 'fateful, even historic mission' to Washington

March 01, 2015  01:46 PM

"I am the emissary of all Israelis, even those who disagree with me."

FSM Archives

More in PUBLICATIONS ( 1 OF 25 ARTICLES )