Unemployment Fraud Exceeds $16 Billion

unemployment fraud exceeding $16 billionUnemployment fraud in the U.S. now costs the government over $16 billion annually, more than the income of everyone in Afghanistan combined. The "overpayment" of unemployment checks, as tracked by the Department of Labor, usually hovers under 10 percent, but it jumped up to 10.6 percent last year. Combined with stubbornly high unemployment numbers, undeserved payouts have exploded, reports MainStreet.com.

In order to qualify for unemployment, an individual must have worked a certain amount in the four or five calendar quarters prior to the claim, known as the "base period." In New York, for example, individuals must have earned at least $1,600 in one quarter of their base period, and worked in at least two. They must also have been let go through no fault of their own; if they were fired for misconduct, or quit, or received a severance package, applicants have little chance.

Recipients must also be ready and willing to work and actively seeking it out. Disabled or sick individuals must apply for disability insurance.

A quarter of overpayments are due to individuals cashing their unemployment checks even though they've started a new job. The rest are from individuals claiming that they were laid off blamelessly despite getting fired or quitting, as well as individuals interpreting "actively seeking work" very, very loosely.

There are vast differences in the amount of overpayment doled out by state, from Kentucky at 3.9 percent to Louisiana at 43.6 percent. And there's surprisingly little correlation by unemployment. Six of the 10 most illegally benefitting states have unemployment rates below the national average. Nebraska has the second lowest unemployment rate in the union at 4.2 percent, but 16 percent of its unemployment benefits are undeserved, which over three years adds up to almost $80 million.

This month the government is starting to actively target and improve the system in the country's most fraud-ridden states.

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