Taxpayers may be less than thrilled with the latest U.S. Labor Department report which notes that both the state and federal governments overpaid approximately $14 billion in unemployment benefits last year. The labor department is now “in the midst of a massive effort to try to recoup” some of the lost funds and to fix the errors which could lead to future overpayments, according to CNN Money. According to information republished on The Blaze, the overpayments are typically the result of an administrative error made by the displaced worker, the employer or the government.
One example of an overpayment cited as an example during the probe involves Ryan Greminger of Richmond, Ind. He collected taxpayer funded unemployment benefits while serving a two year jail sentence. Greminger was laid off in 2007 before he wound up in county jail on drug-related offenses. The Blaze notes that Greminger paid a fellow inmate $50 to have his girlfriend file an unemployment claim for him. Now that he is once again a free man, the government may attempt to collect the $14,000 in unemployment insurance overpayments.
Vice President Joe Biden is in charge of the Campaign to Cut Water, designed to stop the federal government from “overpaying themselves,” according to The Blaze. Last September Biden noted during a speech that unemployment payments were going to folks not only prison but in the graveyard as well.
The U.S. Department of Labor staffer Gay Gilbert stated during the CNN Money interview that approximately half of the unemployment overpayments could be recovered but historically only a quarter of overage payments actually make it back into government coffers. Gilbert explained that when an overpayment is discovered the agency sends a letter asking the claimant to return the funds, but if financial distress is proven and the error was not intentional, repayment may be waved. The government can also take a claimant to court and mandate a wage garnishment, set up a payment plan or withhold a tax refund. In 2011, there were reportedly 2,700 convictions for unemployment insurance fraud.