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Unemployment Insurance Fraud

Updated : August 4th, 2020

United States is one of the few countries in the World which maintains a well frameworked and efficient social security benefits system in place. A range of benefits for all ethnic groups, ages and classes makes it a leader in social welfare schemes across the World. Many of the developed and booming economies across the globe have replicated these schemes in their own countries benefitting millions of citizens.

Unemployment Insurance

One of the prominent government provided benefits is the unemployment insurance which provides limited weekly monetary relief to jobless citizens who are out of work due to involuntary reasons. The labor department in each state administers its own  insurance scheme under the federal guidance.

The weekly dole is paid out to unemployed persons from a pool funded largely by  unemployment taxes collected from employers and substantial contributions by the federal and state governments. In order to be eligible to receive the weekly compensation, an unemployed claimant should fulfill the laid out criteria that differs from state to state. Knowingly providing incorrect information at the time of application or manipulating facts to receive or maximise unemployment is considered a fraud and is punishable under the law.

Unemployment Insurance Fraud

Committing a fraud is a serious offence under labor laws in all states across the country. There are strict laws enacted because protecting the integrity of the unemployment benefits system is on top of the agenda. States are determined to ensure an accountable system.Fraud Prevention

Let us understand what constitutes a fraud so that you are well educated in filing and managing your weekly UI claim.

Examples of Fraud are

  • A claimant returns to work or lands a job and continues to make weekly claims to receive benefits.
  • A claimant does not report accurate wages to the DOL. Lets say you failed to report severance or other payout from your employer during application.
  • A claimant is working part time and does not report the income earned or has undertaken a temporary job, withholds the earnings intentionally.
  • A claimant holds back any other information or provides false details at the time of application.
  • A claimant claiming unemployment compensation on behalf of someone else by providing wrong identity.

A claimant must be vigilant and understand the UI system. Ignorance or tardiness can have unprecedented consequences. We must underline the basic fact that all applications and claims are tracked with the SSN.

The labor departments in many states actively encourage its citizens to report UI fraud to avert monetary losses.

Penalties for Committing a Fraud

Fraud is a criminal offence and the consequences of it may attract one or more penalties as below.

  • Repayment of benefits collected including fines and other charges
  • Barred from collecting benefits in the future
  • Repayment of benefits collected including fines and other charges
  • Prosecution for criminal charges and possible jail sentence

Needless to say, the above list is not exhaustive. We’ve only described the most common penalties.

How to Keep Away From Fraud

By simply knowing the rules and your responsibilities. At any point of time, should a question arise, you must immediately contact the phone service of the labor dept in your state.

  • Report gross and accurate wages.
  • If you are under a severance payout, apply only towards the end of it.
  • Provide correct information at the time of filing. Do not manipulate or suppress.
  • Apply for and maintain work search records as requested.
  • Be willing to accept a suitable job offer and report to DOL if you denied the offer for a valid reason.

The labor department’s work with various agencies to detect and prevent fraud. This also includes a well co-ordinated network with federal agencies for data exchange on claimants, wages etc.

Reporting Fraud in Your State

Known cases of fraud are quite a common occurrence. Fraudsters hoodwink and receive thousands of dollars of unemployment insurance. There are cases of scams that cause major financial loss to the state exchequer.

If you know someone who is cheating to make financial gains by drawing UI or suspect a person to be deceiving the system, report it immediately to the labor dept in your state. All of them have an exclusive hotline number to report and manage fraud cases. You can find the relevant and contact information on the respective websites.

As a responsible citizen of the country, you must consider it an obligation to report any suspicious activity. Your identity will be kept confidential and in some states, you have an option to remain anonymous.

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  1. So I have been getting ue for 6 months and on Oct 21 I had a fact finding issue found and cleared after taking a month, I got put on hold I got nothing no benefits nothing because I am on hold until cleared up and it was another month later in my favor, I’ve been without payment since Oct 21 since then I have been on HOLD, I am beyond pissed, I call every Fri I see the letter I received saying its in my favor that says I am Monetary Eligible-yet I still have 6 payments on hold. I call DEO and I talk, I beg and I get told “we are working on it”, the letter is in my favor I am poor not rich I am poor Why how do you people get away with this

  2. Hello

    I’m 59 years old and was laid off in March 2020 due to Covid.
    In June 2020 I was advised my job was eliminated and there is no chance of me
    Being brought back. I’m collecting UI since March.

    Pondering the thought of taking my early retirement pension as I can’t survive on
    UI any longer. My pension is of course reduced due to my age. Full pension is age 62.

    If I apply for early reduced pension in this situation, does my UI benefit get decreased? I’m in New York.
    I’m still looking for full time work. No luck.

    Thank you so much
    Lorraine

  3. i was just layed off from my job, i did collect benefits in pa. my job is seasonal igot unemployment payments in jan. to april i had 26 weeks of unemployment , but only used about 13 weeks, and was called back to work. i received 2 weeks of 600 dollars of stimlus money. my question is now that i reopened my 2020 claim . i,m i still elegibe for any more stimlus payments along with my regular unemployment payments.

  4. I am 65 yrs old in California and being layed off in Dec 2020. If I apply for unemployment benefits and collect a company pension, will the pension reduce the unemployment benefits ? If you answer call unemployment what is the department or do you have a phone number for a help line. I have called and get automated questions that do not apply to my situation.
    Cannot get to a live person.

  5. Several years ago I was part of a reduction in force and was early-retired for pension purposes. I count on this small pension ($2K/mo) to supplement my employment which has been inconsistent this past two years. I am filing for UI in IL and I qualify for it, but they are saying my pension reduces my UI benefit to zero. Is that right?

    1. Mike,

      That is partially right. The pension will have an impact on UI benefits. Please check for relevant info on the Unemployment Office’s website.

  6. I have $219.00 left on my UE and still no work due to covid-19 will i be able to get a extension on my UE and will it cover the last two weeks. I request payment tomorrow.

      1. My benefits have expired, still.unemployed due to over 65, wdiebrtes, high blood pressure and have one kidney, Can I get PUA , Cares Act for any assistance

  7. im working at a place i have been layed off from a lot in my career.i got 30 yrs in there so i can retire now but need another job to make it hoping to stay working and get more hours.If i take a new job and get layed off there I will BE DRAWING 1400 A MONTH FROM THE JOB I WORKED 30 YRS would i be able to draw unemployment if the new job lays me off and would it be reduced because of my retirement money of 1400 month.

  8. My bf was laid off in April he got the the 600 to start with now he is only getting the unemployment and no extra when we hear ppl getting 3 checks totaling 40k that might be lies but still that is bullshit.

  9. I Sharon Bland or Sharon Scott or Sharon Ann Mccraw
    Use my phone to claim two of my boyfriends and my own benefits. Is that ok ?

  10. I’m getting pua on employment and it was supposed to be backdated to May 27th when I wasn’t ableable to start my new job and somehow it’s August 24th they said it would be backdated been sending messages and pua people keep saying they have emailed you guys too but nobody gets back to me who do I need to contact about this thank you

  11. I check my checking account balance every week but I cannot tell if I am getting my 300.00 extra unemployment. Also. How can I tell if I got my back time unemployment .

    1. Thelma,

      I did not understand what you meant. Please reach out to the Unemployment Office for precise answers to all your questions.

  12. I have exhausted my UI and all extensions. Not eligible for Fed Ed. Does EDD open a PUA claim for me. Or do I have to aoole for it. Its been past 30 days since receiving my Fed Ed denial letter.

  13. i have been unemployed for the whole year almost and since i have been trying to distance myself to better my all around health, it took me this long to file for benefits, i was hoping to get back pay all the way to the beginning.

    1. Zach,

      To qualify, the claimant is required to have sufficient earnings/employment during the “Base Period”. Please use the “Benefits Calculator” available on this website for more.

  14. Thank you o much for investigating this. When I received an overpayment statement and my benefits where stopped I felt my heart drop to my stomach. Already being evicted by a slumlord and now no income, i had to start working when i feel very at risk for getting the virus because of pre-existing conditions and the reason for filing in the first place. i am a cosmetologist and considered non-essential. I feel utterley hopeless and helpless in this situation.

  15. I cannot contact anyone in the unemployment offices because the phone hangs up on me in all cases after listening over and over the recorded message. I have called three numbers .

    I have received pandemic unemployment since March 31st. There was a pending adjudication but I never received any questions, letters nor emails about it and I was approved and paid. Now…this is what the website says:
    7 of 7 entries
    Issue Identification Number Employer Name Issue Type Status Date Mailed Level
    0002 7693 59-01
    PUA Pending 11/16/2020 Adjudication
    0002 4773 71-01
    Program Integrity Mailed 11/6/2020 Adjudicati
    Claimant Inbox
    Select the Search button to display your action items. To narrow your search, input issue date range below and select the Search button.
    Issue Date: From: To: 11/6/2020 to 11/16/2020
    Inbox
    • Below are the items that require your attention and that you need to take action on for your claim.
    • Select the Document ID
    I need this money to survive as others do while I am trying to re-establish any contract freelance work I am capable of doing….I report my small jobs as I get them but they do not come close to equaling my unemployment as of yet. Please tell me where I can go to find out what is needed here.

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