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Nearly Half of Pandemic Unemployment Benefits May Have Been Improperly Paid with One in Five Dollars Going to Fraudsters

October 14, 2022

A new report from the Labor Department’s Inspector General (DOL-OIG) reviewed pandemic unemployment benefits in just four states over a six-month period, finding that 42 percent of funds were improperly paid and estimating nearly 14 percent, or nearly $10 billion, likely went to fraudsters. 

This comes after Democrats rejected holding top Biden Administration officials accountable by forcing them to respond to reports of pandemic unemployment fraud. Worker and Family Support Acting Republican Leader Rep. Brad Wenstrup (R-OH) offered this “resolution of inquiry” in September.

REMINDER: Over $163 Billion Stolen from the Workers and Businesses Who Needed it Most

While the audit attributed the “historic” level of improper payments and fraud to four causes, including reliance on self-certification in the Pandemic Unemployment Assistance (PUA) program, they also note congressional action, led by Ways and Means Republicans in December 2020, helped mitigate further fraud. 


While Democrats have ignored calls for congressional oversight hearings and rejected amendments that would have prevented further fraud, Ways and Means Republicans have been working to respond to red flags raised by the DOL-OIG and Government Accountability Office (GAO) since the Fall of 2020. 

Here’s a timeline of our actions.

The Biden Administration Has No Idea Exactly How Many Tax Dollars Have Been Stolen or Improperly Paid.

  • In just two years, federal and state payments from three pandemic-related unemployment programs totaled more than $872 billion, but the amount lost to fraud is still not known.
  • In February 2022, the White House estimated that 19 percent of total COVID unemployment insurance payments were improperly paid – offering a low estimate of over $80 billion.
  • By contrast, the Department of Labor has a much higher estimate. Outside experts say the number could be as high as $400 billion.
  • In May 2022, the Washington Post reported that an estimated $163 billion were siphoned away by fraudsters, and that if the government’s best estimate is accurate, only 2.4 percent of wrongful payments have been recovered.
  • New reports from the GAO raise red flags about unemployment fraud during the pandemic that Democrats ignored despite Ways and Means Republicans’ demands for preventive measures and oversight hearings for at least two years.

 Americans Deserve Accountability For The Billions Lost In Covid-Unemployment Benefits. 

  • Under the Commitment to America, Republicans pledge to hold government accountable. 
  • In June 2022, Republican Leaders introduced the Chase COVID Unemployment Fraud Act of 2022 (H.R. 8000) to gain restitution for taxpayers by going after criminal actors, including international cybercrime organizations, and recovering billions lost to fraud.

CLICK HERE to read the full report. Key excerpts below:

“We found ETA and states did not ensure pandemic-related UI funds were paid only to eligible individuals promptly. Of the 4 states we tested, from March 28, 2020, through September 30, 2020, we estimated $30.4 billion of the $71.7 billion in PUA and FPUC benefits were paid improperly (42.4 percent). We estimated $9.9 billion of that was paid to likely fraudsters (13.8 percent). Notably, in the 4 states, 1 in 5 dollars initially paid in PUA benefits went to likely fraudsters.”

“ETA and states made significant efforts; however, they did not protect pandemic-related UI funds from historic levels of improper payments, including fraud. We attribute this to four causes. Specifically, states did not perform eligibility testing, ETA’s oversight was not timely enough, PUA initially allowed claimants to self-certify their eligibility, and ETA suspended 1 of their primary oversight tools for the first 3 months of the CARES Act.”

“Subsequent to our work identifying the fraud risks, Congress took action to require supporting documentation to improve SWAs’ (state workforce agencies) abilities to ensure proper claimant eligibility and to mitigate fraud.”