The U.S. Department of Labor reported that an estimated $14 billion were overspent in unemployment benefits in fiscal 2011.
The federal government and states like Indiana, one of the worst offenders, are now trying to recoup the lost money and prevent future overpayment.
According to the Census Bureau, the distributed benefits did help 3.2 million Americans in need in 2010. However, there are three types of people who have received overpaid funds: people actively searching for jobs, those who were fired or quit their job, and those who have returned to work but are continuing to claim unemployment.
Overpayment is typically an administrative error made by the government, the employer, or the employee. It can also be a combination of all parties.
Scams also contributed to overpayment with claims involving prison inmates, illegal immigrants, and deceased citizens. During fiscal 2011, there were 2,700 convictions of fraud related to unemployment insurance. Punishment typically consists of probation, community service, or an added penalty to the payback amount.
Ryan Greminger, 39, of Richmond, Indiana admits that he collected unemployment benefits while serving a two-year prison sentence for a drug-related crime. Prior to his conviction, he was laid off from a factory in 2007. He was encouraged to keep filing claims from a fellow inmate.
"It's not like some big scheme I thought of," Greminger said. "I paid this guy $50 each time to have his girlfriend — a woman I had never met — file my unemployment claims."
Greminger explained that he needed the money to provide for his fiancé and their four kids. He is now out of jail and working to repay over $14,000 to the state.
"I accept responsibility for what I did. It was wrong. It was a mistake," he said. "I'm paying for it now."
Vice President Joe Biden is now leading the charge against wasted federal spending through the Campaign to Cut Waste initiative.
The Labor Department predicts that only half of the overpayments can be recovered. Gay Gilbert, an administrator in the Labor Department’s Office of Unemployment Insurances said that only a fourth of the “recoverable” funds have actually been retrieved.
“We believe our improper payment rate has very slightly started to tick down," Gilbert said.
When the federal government discovered overpayment, a letter is sent to the worker instructing them to return the funds. In some states, workers are allowed to prove if they are in financial distress to waive the payments. Otherwise, claimants can be taken to court if they do not pay back what they owe.
Repayments can be processed by being withdrawn from garnishing wags, being deducted from federal income taxes or payment plans.
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This Week’s Celebrity Instagrams (10/7-10/14)
25 photos Launch gallery
1. Nite | to the tune of @cnn 😞
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2. Got so much work to do but I just wanna stay in bed and binge watch #Gameofthrones and start the new season of #OnceUponATime. I know I can't be the only one. Right? Ha 💤🦁🍂 #saturday
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3. Mommy's weekend turn up ❤️👶🏾💕🍼 Wouldn't trade it for nothing. #TeamNoSleep lol #HesMyBiggestBlessing ✨
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4. One of them oh shit mont we made it feelings … this shit still be unreal 💯💪🏾 @remyboymonty1738
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5. Tickets Available October 14 @ticketmaster.
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6. People magazine Home edition has raided my house! Get a sneak peek into the bedroom life of the Leakes and see other parts of my home now at PEOPLE.COM
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7. They want to kick you when you down, but kick it when you up
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8. Got my advance copy of #Mafia3 at @gamestop. Get yours via link in the bio #Mafia3 #Ad
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9. This is some of the cast and our diverse team of writers in the writer's room creating funny sh*t for @nbcmarlon what a fun room! Lots of jokes, great stories and having a great time doing what we love... making people laugh and feel something. Look out for our show next year @nbcmarlon we bringing sitcoms back to NBC
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10. #HappySunday☀️Thank you @4everbrandy101 💛💡💛
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11. Happy to be back in Central Falls, RI breaking ground for the One Stop Health Center and hosting a local community event with #Vaseline.
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12. Thank you all in advance 💋💋💋 #Repost @urbansvintage・・・#TarajiPHenson's memoir #AroundTheWayGirl will be available everywhere TODAY October 11th! Will you be purchasing a copy? #UrbansVintage
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13. Moms got my back
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14. @galore dinner party glo ✨ thanks to @styledbygiigii
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15. 🌹#ThisIsWhatTheTruthFeelsLikeTOUR #forevereve
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16. Yes, all those videos I've been posting have led to this: the introduction of skincare to @TYRABeauty! This is the rundown on the new line:Years of research and beauty tips I live by led me to produce the most effective and delightful skincare out there. I'm all about taking really good care of my skin, so I can look like I'm aging in #TyraYears and go filter free on Instagram when I feel like it! Now, it's your turn. ✨My Mama always told me not to wash my face with just my hands. "Tyra, girl, you're just moving the dirt around!" And I've listened. First up is The Clean Machine.... ...a 3-in-1 foaming face wash that cleanses, removes makeup and purified your skin. It has patented technology - a attached Turbo Cleansing Tool - to give you that deep clean that makes your skin feel super fresh. Wanna know more? Yeah, baby. Click that link in my bio.
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17. On set of #beingmaryjane like... ❤️😬💃🏾
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18. #carouselofhope@yvetteshelton100@makeupbylatrice @thestacetheface@marialuciahohan24
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19. I refuse to let a little cold stop me from my daily routines to greatness. #onlythestrongsurvive #warriors
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20. Big things begin with big THINKING... #BusinessEthics #SetLife 🎥
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21. Goodnight - here's a song
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22. Words can't explain the feeling that I have right now.....God is good. look momma I made it. #Harts #Blessed #WhatNow #comedicrockstarshit #4DaysAway
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23. I tried to get a better video with out the nasty bib but she started getting mad at me..lol! Big cuz @the_queen_caitlin trying to show her what to do. #MamasToots #HeirBear👑💜
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24. Gorgeous Serena joined Beyoncé in Formation last night on stage in New Jersey!!!
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25. 😜 @lifeofdesiigner & @rockohill
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