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States Provided $100 Million to Combat Unemployment Insurance Fraud

The U.S. Department of Labor announced $100 million in funding to support state efforts to combat fraud and recover improper payments in the Unemployment Insurance (UI) program, including those programs created under the Coronavirus Aid, Relief and Economic Security (CARES) Act.

At the same time, the Department’s Employment and Training Administration (ETA) issued UI Program Letter (UIPL) 28-20, which highlights tools and strategies to assist states in strengthening their anti-fraud operations, including the availability of a new identity verification solution to confirm the identity of individuals filing for unemployment benefits.

The coronavirus has led to an unprecedented increase among state workforce agencies in the number of individuals filing claims to receive benefits in the regular UI program as well as the CARES Act UI programs, specifically the Pandemic Unemployment Assistance (PUA) and Pandemic Emergency Unemployment Compensation (PEUC) programs. As states work diligently to provide these important benefits to eligible individuals, they also face significant challenges due to increased fraudulent activity and identity theft amid new and emerging fraud schemes.

States are permitted to use this targeted funding for staff or contract services to conduct fraud investigations and other fraud detection-related activities, and to implement tools to increase prevention, detection and recovery of fraudulent improper payments in the PUA and PEUC programs.

The Department encourages state agencies to adopt new fraud prevention and detection strategies, and utilize Unemployment Insurance Integrity Center resources to enhance current fraud prevention operations. The Center’s Integrity Data Hub is a secure data cross-matching system, containing an array of effective fraud prevention and detection tools. The Hub’s new identity verification solution is now fully operational and available to all states.

The Department encourages states to use these funds to enhance their PUA and PEUC fraud prevention efforts and to work with the Employment and Training Administration and the Unemployment Insurance Integrity Center to use these resources to address fraud aggressively in these programs.