Government Paid $1.6 Billion In Unemployment Benefits To People Not Looking For Work

Thousands of unemployed people wait outside the State Labor Bureau in New York City to register for federal relief jobs in 1933.

Department of Labor Audit Shows US Federal Government Paid $1.6 Billion In Unemployment Benefits To People Not Seeking Jobs

According to an audit from the Government Accountability Office, the government paid out more than $1.6 billion in unemployment insurance (UI) benefits to individuals who didn’t seek work in fiscal year 2016.

UI is only provided to workers who’ve lost their jobs if they actively look for work while they are collecting.  States set their own search requirements, and the “job seeking” condition will usually be met if the applicant can prove that they’ve been in contact with potential employers, have submitted job applications, have been to networking events, or have made employment inquiries with third party services etc.

It’s not an onerous condition—in fact, it’s just common sense.  Why should the state help someone who refuses to help themselves?

Looking specifically at the audit: its purpose was to determine whether or not welfare abuse was occurring, and if so, get a picture of the extent.  As it turns out, the government paid $1.6 billion to individuals that it should not have.  The report states:

According to Department of Labor’s estimates, over $1.6 billion in benefit payments were made to claimants for weeks for which they were issued formal warnings [for not seeking employment] in fiscal year 2016. . .

DOL’s analysis further shows that if formal warning cases had been included in DOL’s calculation of the overpayment rates for fiscal year 2016, the nationwide overpayment rate would have increased by about 5 percentage points, from an estimated 11.1 percent to an estimated 16.3 percent.

Basically, the DOL is aware that people aren’t looking for work, and paying them anyways.  This may be all well and good in the case of a private charity, but public funds are entrusted to the government on the condition that they be spent according to the law.

In response to the audit, Department of Labor is working on strategy to mitigate over-payments, that centers around better training its staff, and issuing guidance for states, which will help harmonize work requirements across the country.

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About John Whitaker 36 Articles
Journalist, small cap trader, classical conservative.