Dole deception: Fraud accounts for huge overpayment by states in unemployment benefits 

WHAT: Preliminary estimates released by the U.S. Department of Labor find that in 2009 states made more than $7.1 billion in overpayments in unemployment insurance, up from $4.2 billion the year before. The total amount of unemployment benefits paid in 2009 was $76.8 billion, compared to $41.6 billion in 2008.

HOW: Fraud accounted for $1.55 billion in estimated overpayments last year, while errors by state agencies were blamed for $2.27 billion, according to the Labor Department. Assistant Secretary for Employment and Training testified before Congress in May that the top cause for overpayments was people returning to work and continuing to claim benefits.

WHAT’S BEING DONE: Help may be on the way for states grappling with overpayments. Under federal law, when states recover overpayments, they must deposit the money back into their unemployment funds. Legislation backed by the Obama administration would allow states to spend up to five percent of the recovered money to prevent, identify or recover future overpayments. It also would require states to issue penalties of at least 15 percent of the amount owed for fraud-related overpayments.

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