Government Gave Over $100 Billion of Taxpayer Money to Welfare Fraudsters During Pandemic, Watchdog Finds

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September 12, 2023

The government gave away over $100 billion in unemployment insurance benefits to fraudsters during the COVID-19 pandemic, according to a report released Tuesday.

Between $100 billion and $135 billion worth of federal unemployment insurance benefits were collected by fraudsters during the pandemic, according to a report from the Government Accountability Office, which audits government agencies.

The total amount of fraud accounts for between 11 percent and 15 percent of the total amount of unemployment insurance benefits doled out between April 2020 and May 2023.

The office considers unemployment insurance benefits to be of high risk for fraud, and it has issued 26 recommendations since 2018 to the Department of Labor, which oversees the program. The department has incorporated 10 of them.

The Department of Labor, under acting secretary Julie Su, disputed the office's methodology, but the office stood by its conclusions, highlighting the high confidence it had in the findings.

While Su was the head of California's Labor and Workforce Development Agency, a position she held until July 2021, the state paid out $31 billion in fraudulent unemployment insurance claims during the pandemic. To recoup the funds for the now-insolvent unemployment fund, the state has levied a payroll tax—which Republicans have called the "Su Tax"—that could exceed $400 per worker each year.

Unemployment insurance is not the only program responsible for heavy amounts of pandemic fraud. The Small Business Administration's inspector general found in June that fraudsters stole approximately $200 billion from the Economic Injury Disaster Loan Program and the Paycheck Protection Program.