A group of U.S. Senate Republicans introduced legislation last week to recover funds lost to unemployment insurance (UI) fraud.
The Protecting Taxpayers and Victims of Unemployment Fraud Act seeks to claw back federal funds taken through UI fraud and prosecute those found to engage in criminal fraud in pandemic unemployment programs. In addition, it extends the statute of limitations for criminal charges or civil actions from 5 to 10 years.
Further, the bill gives the federal government and states better tools to detect and prevent future fraud in federal UI programs. Specifically, it allows states to keep 25 percent of recovered fraudulent overpayments of federal funds and use recovered funds to improve program integrity and fraud prevention. It also allows states to keep 5 percent of state UI overpayments, as long as those funds are dedicated to preventing future fraud.
“Improper payments in pandemic unemployment programs left taxpayers on the hook for hundreds of billions of dollars,” said U.S. Sen. Mike Crapo (R-ID), ranking member on the Senate Finance Committee and a sponsor of this bill. “This legislation will help gain restitution for victims of fraud and theft by jumpstarting efforts to claw back federal funds and recover fraudulent payments.”
Only about $5 billion of an estimated $191 billion lost to misspent unemployment insurance has been recovered, according to the senators.
A companion bill (H.R. 1163) has passed in the U.S. House of Representatives.