Pennsylvania's unemployment compensation program overpaid benefits by an estimated $227 million in 2009 due to fraud. That amounts to 4.68 percent of all the money in paid out that year, according to the U.S. Department of Labor's Benefit Integrity Measurement Program, which tracks overpayments of unemployment benefits in all 50 states. If the agency denies benefits for any reason, including a suspicion of fraud, they must provide advance notice and give you time to appeal.
It is a crime to knowingly make a misstatement on an application for unemployment benefits, according to the Pennsylvania Bar Association. Abusers may be forced to repay all benefits, and they may face a lien against their persons. Each illegally obtained check may result in a $200 fine and 30 days in jail. Individuals convicted of unemployment fraud are also ineligible to receive benefits for a year.
Finding Fraud Methodology
Accounting for fraud is notoriously difficult, as it is nearly impossible to measure something that by its nature is concealed from view. The Benefits Accuracy Management Program measures fraud by reviewing a sample of randomly selected unemployment fraud claims. They do not review each claim. They also differ in their hunt for fraud from state auditors. Federal benefits investigators exhaust all possible avenues for investigation in examining the accuracy of claims. State officials need only take reasonable steps to ensure the accuracy of claimants' statements. This means that some fraudulent claims aren't detected by state officials.
The department's Benefit Accuracy Measurement Program program found three types of fraud in Pennsylvania. For an estimated 1.43 percent of cases, claimants over-reported the amount of money they earned in a prior year, leading the program to overpay. For another 2.6 percent of cases, claimants intentionally misreported the reason they became unemployed, making them eligible for benefits even though they weren't legally entitled to them. Less than 1 percent of claimants failed to report outside income.
Not All Fraud
Not all overpayments of benefits are fraudulent. In some cases, the state agency made an error in calculating benefits. Employers and employees may disagree over the nature of the separation from employment. In some cases, the claimant makes an error. According to the Department of Labor, claimants are solely to blame for overpayments in 54 percent of instances.