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U.S. overpays over $3.6 billion in government-funded unemployment benefits: watchdog - Metro US

U.S. overpays over $3.6 billion in government-funded unemployment benefits: watchdog

FILE PHOTO: The spread of the coronavirus disease (COVID-19), in Fort Smith

WASHINGTON (Reuters) – The United States has overpaid more than $3.6 billion in government-funded unemployment benefits from the onset of the COVID-19 pandemic in March 2020 through February this year, a government watchdog said on Wednesday.

The Government Accountability Office (GAO) said in its latest report that it continues to have concerns about overpayments and potential fraud in the unemployment insurance (UI) system. The government expanded unemployment benefit eligibility to people who did not qualify for regular state unemployment insurance, to cushion against the pandemic’s economic shock.

The government-funded Pandemic Unemployment Assistance (PUA) program covers, among others, the self-employed and certain gig economy workers. Funding for the program was included in the pandemic relief packages passed during former President Donald Trump’s term and extended in President Joe Biden’s $1.9 trillion rescue package approved this month.

“As of March 15, 2021, DOL (the Department of Labor) reported that states had identified more than $3.6 billion in PUA overpayments from March 2020 through February 2021,” the GAO said.

The watchdog said the Labor Department was taking measures to collect data on states’ recovery of PUA overpayments. But the GAO also noted that legislation enacted in December 2020 provided states with authority to waive certain PUA overpayments.

“Thus, additional data on the amounts of PUA overpayments states have waived are also needed to effectively monitor the recovery of overpayments,” it said. “GAO recommends that DOL collect data from states on the amount of overpayments waived in the PUA program, similar to the regular UI program.”

Since the pandemic started, the unemployment insurance program has been dogged by problems ranging from backlogs to fraud, which economists say are keeping weekly unemployment claims elevated. There were at least 7.735 million people on the Pandemic Unemployment Assistance program in early March.

(Reporting By Lucia Mutikani; editing by Jonathan Oatis)

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