Overpayments are a rampant problem in the unemployment insurance system. The federal government and states overpaid an estimated $14 billion in benefits in fiscal 2011, or roughly 11% of all the jobless benefits paid out, according to reports from the U.S. Labor Department.

Of the states, Indiana was the worst offender, making more improper payments than it did correct ones.

Now, the U.S. Department of Labor and the states are in the midst of a massive effort to try to recoup some of their lost funds and avoid future overpayments.

The vast majority of unemployment benefits do go to people in need. In 2010 alone they helped keep 3.2 million Americans out of poverty, according to the Census Bureau.

But of the overpaid funds, most end up in the hands of three types of people: Those who aren't actively searching for a job, those who were fired or quit voluntarily, and those who continue to file claims even though they've returned to work. Any of those circumstances would make a person ineligible for benefits.

The overpayment typically results from an administrative error made either by the government, the employer, the worker or a combination of the three.

In much rarer situations, people deliberately defraud the system, using fake documents or identities. Common scams involve prison inmates, illegal immigrants or even the deceased...

Vice President Joe Biden is charged with leading the Campaign to Cut Waste, an initiative started last year that aims to cut overpayments at federal agencies.

Unemployment insurance boasts the second highest rate for "improper payments" of any federal program, behind the National School Lunch Program. "Unemployment checks are going to people in prison. Unemployment checks are going to graveyards," Biden said in September.

The Labor Department estimates that roughly half of its overpayments are recoverable, but falls far short of recouping that much. Historically, only about a quarter of the estimated "recoverable" overpayments have actually been recovered, said Gay Gilbert, administrator in the Labor Department's Office of Unemployment Insurance.

READ FULL SOURCE ARTICLE

Editor's Note: And the Obama Administration thinks the federal government would do a great job administering health insurance regulations...HA!


The BasicsProject.org informational and educational pamphlet series is now available for Kindle and iPad. Click here to find out more...


The New Media Journal and BasicsProject.org are not funded by outside sources. We exist exclusively on tax deductible donations from our readers and contributors. Please make a tax deductible donation today.