Unemployment Claims Stalled Due to Fraud and Backlogs

Unemployment Claims Stalled Due to Fraud and Backlogs

(AmericanProsperity.com) – The four-week running average of new unemployment claims is 878,250, according to the latest Department of Labor (DOL) report. However, the sheer number of new claims since March continues to cause enormous backlogs and suspicions of fraud.

As millions of Americans await a decision regarding their application for benefits, many citizens are unsure if they can make ends meet this month.

Delays in Unemployment Benefits

On September 19, California’s Employment Development Department (EDD) Director Sharon Hilliard established a plan to overhaul the unemployment claims process. Governor Gavin Newsom (D) adopted the suggested changes, which include a two week reset period where no new claims will be accepted.

With this strategy, they hope to clear the backlog of almost 600,000 unprocessed unemployment applications that have piled up in the past 3 weeks. Moving forward, the new plan should prevent fraud and keep the backlog low, according to the EDD Strike Team Report:

Fraud Runs Rampant in Unemployment Insurance Claims

The sheer backlog of applications is far from the only issue. Scammers targeted many states, especially those with robust unemployment and aid packages, in order to receive benefits they were ineligible for.

California just purged its list of Pandemic Unemployment Assistance (PUA) beneficiaries, cutting it from 6.4 million to 3.4 million last week. PUA temporarily expanded unemployment insurance during the COVID-19 pandemic. The decrease is believed to be from identifying and removing people who were counted twice, either from fraud or user error.

In Washington, the state paid $650 million in unemployment benefits to a Nigerian-based fraud ring and has only recovered half of it so far.

Pennsylvania announced 10,000 state prison inmates illegally applied for benefits. PA Attorney General Josh Shapiro shared that investigations uncovered fraud rings in multiple prisons:

Many Americans Face an Uncertain Future

Many Americans still find themselves out of work while their unemployment benefits phase out in certain states. Others still have yet to receive these much-needed benefits due to backlogs and fraud. Meanwhile, their bills continue to pile up.

The government’s safety net that many relied on is no longer reliable. Instead, citizens must look to one another, community organizations, and local churches for help when government assistance is delayed.

~Here’s to Your Prosperity!

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