Louisiana: $405.3M in ineligible unemployment benefits paid out

Louisiana

NEW ORLEANS — At a time when people were hurting, some may have taken advantage of unemployment benefits.

The Louisiana Legislative Auditor found $405 million distributed to people who didn’t qualify.

The Louisiana Workforce Commission primarily blames the surge in people applying for unemployment and the lack of documentation to determine benefit eligibility.

According the Legislative Auditor, the benefits were paid out between January and September 2020. The investigation began after a surge of costs and the number of applicants during the pandemic.

In 2019, there was an average of nearly 2,000 claims per week. Between March and April 2020, LWC averaged more than 88,000 claims per week.

The Workforce Commission claims they struggled to verify people’s eligibility and employers were given extensions to submit wage reports to the state. If LWC was not given the data, they based determinations off self-reported information from applicants.

The auditor used data from LWC to identify people who were over paid or ineligible for benefits.

The Workforce Commission agrees with the auditor’s report adding the investigation highlights the challenges they’ve faced through COVID.

In a letter to the State Auditor, LWC says supplemental benefits through the Cares Act and other federal resources incentivized “bad actors to take advantage of already overwhelmed state workforce agencies.”

The next step if for LWC to enter into repayment agreements with those impacted. If that does not happen, the money can be recouped from a person’s state and federal taxes.

If fraud is determined, the recipient must pay a 25% penalty and that person will not be eligible for unemployment benefits for at least one year.

LWC also says fraudulent cases could be referred for prosecution.

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