Fraudulent Payments are NOT Unique to Unemployment Insurance or Pandemic Unemployment Insurance Programs
As with many of the pandemic assistance programs the rush to make unemployment insurance payments likely has resulted in significant over payments and fraudulent payments. Unemployment insurance is not unique as it seems highly likely that improper and fraudulent payments have and will occur in the PPP, Restaurant Recovery, and Venue Recovery loan and grant programs, rent relief programs, homeowner relief programs, recovery act payments, and in child tax credits.
Because pandemic unemployment insurance payments currently substantially exceed regular unemployment insurance payments in Oregon I thought it might be interesting to see how much Oregon has previously reported in fraudulent pandemic unemployment insurance payments and how much of that reported amount has been recovered in CY 2020.
To be clear I am focusing only on 2020 dollars of fraud discovered and recovered for these pandemic unemployment insurance programs: PEUC, FPUC, and PUA.
I am NOT focusing on all unemployment insurance programs, nor on all improper payments, nor on ID theft which is a subset of overall fraud.
OED Doesn't Disclose Unemployment Insurance Fraud Data to the Public
The Oregon Employment Department has repeatedly declined to release information about unemployment insurance fraud on the theory that public disclosure could undermine their efforts to prevent unemployment insurance fraud.
But OED Does Report Fraud Data in Quarterly and Monthly Reports to the Department of Labor.
In the absence of information from OED I dug out from DOL websites calendar year 2020 information for three pandemic unemployment insurance programs: PUA, PEUC, and FPUC. This data is derived from official report data as submitted by OED.
Planning, locating and extracting data from multiple reports was the challenge and likely the reason there has been little reporting of actual fraud counts and dollars not just in Oregon but around the country. I was able to do so and will be able to track that reporting on an ongoing basis.
To my knowledge this DOL required data is the only public facing official source of fraud data for unemployment insurance programs.
IF this reported data is incomplete or inaccurate the fraud data reporting shortcomings for Oregon seem likely to have been repeated in other states and the DOL would therefore have no reliable source of data to monitor fraud in these unemployment insurance programs.
The table pasted below shows these CY 2020 results (and the data sources).
OED Data Reported to DOL:
- $1.5 Million in fraud was identified out of $3.9 Billion in pandemic UI payments.
- Of that $1.5 Million in detected pandemic UI fraudulent payments only $53,000 was recovered.
- IF reported fraud and recovered fraud payments were only 1% of total pandemic benefits the amount of reported and recovered fraud would have been a much higher $39,440,000.
- In CY 2019 DOL reports show that the Oregon fraud rate for the regular unemployment insurance program was 4.3%+; at that rate total pandemic fraud would have been more than $172 million in 2020).
This Means That:
- Reported fraud was only 39 cents for every $1,000 in pandemic UI payments.
- Reported recovery of established fraud amounts was only 1 cent for every $1,000 in pandemic UI payments.
- It seems highly likely that 2020 official fraud reporting for these pandemic programs understates the scope of the problem.
- This data is for CY 2020, it's possible there has been improvement during CY 2021, including stepped up recovery of previously identified fraudulent payments.
- This data is ONLY for theses three pandemic programs. Fraud identification and recovery could be substantially different for the Regular Unemployment and Workshare UI programs.
- Fraud under the Unemployment insurance Lost Wage Assistance program is not included in this analysis.