Unemployment Fraud Reaches $16 Billion

The government gave out $16 billion in unemployment checks last year to people who weren’t really unemployed or who were cheating the system, the Department of Labor announced recently (and Mainstreet.com reported).

The Department of Labor tracks estimated rates of “overpayment” of unemployment checks, which usually fall around 10 percent. In 2010, that rate rose to 10.6 percent, which, combined with the number of people who are out of work, that translates to $16.5 billion.

A quarter of improper payments come from people who take a job but don’t notify the government to stop sending unemployment checks.

More people are applying for—and receiving—unemployment checks even if they quit or were fired (which isn’t supposed to get you a check), and yet others are receiving checks without actively looking for work.

According to DoL data, the overpayment problem is much different depending on where you live: overpayment rates in Louisiana and Indiana reached 43 percent, while overpayments in Vermont and Kentucky were lower than 5 percent.