Estimate of COVID-19 unemployment fraud revised up to as much as $135 billion
Gabrielle M. Etzel
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COVID-19–related unemployment fraud likely reached between $100 billion and $135 billion, according to a report from the Government Accountability Office.
The report doubles the estimates provided in testimony in February to both the House Ways and Means Committee and the Senate Finance Committee.
“I am extremely alarmed by these findings and even more convinced that immediate action is needed to recover as much taxpayer dollars as possible,” Ways and Means Committee Chairman Jason Smith (R-MO) said. “Unemployment fraud punishes workers and families by taking resources away from law abiding Americans who deserve assistance and puts those resources directly in the pockets of criminals.”
The GAO report was requested by leadership on both congressional committees to document fraud and abuse of COVID-19 relief dollars.
The report estimates that 11%-15% of the total amount of unemployment insurance benefits distributed between April 2020 and May 2023 were fraudulent payments. The GAO says, however, that the full extent of the fraud “will likely never be known with certainty.”
“These shocking estimates continue to grow, and, as GAO notes, we may never know the full scope and scale of fraudulent pandemic payments,” said Sen. Mike Crapo (R-ID). “Unfortunately, the Administration’s efforts to address over one hundred billion dollars in fraud in the UI program have fallen woefully short.”
In May, the House voted on a bipartisan basis to pass H.R. 1163, the Protecting Taxpayer and Victims of Unemployment Act. The bill is intended to incentivize states to recover fraudulent unemployment payments and extend the statute of limitations for prosecuting fraud from the current five years to 10. The legislation would also aim to improve program integrity by allowing states to keep up to 5% of state unemployment insurance over-payments recovered if they are dedicated to supporting future system abuse.
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Crapo introduced a companion bill in his committee shortly after the House passage, which he says is necessary to “recoup stolen funds for victims and prevent similar large-scale theft from happening in the future.”
“The fraud detailed in this report represents the greatest theft of taxpayer dollars in American history, and underscores the dire need for Senate Democrats to take immediate action,” Smith said.