State sent $405 million in unemployment to people not eligible to receive it

Louisiana

The coronavirus pandemic was an unprecedented disaster for Louisiana’s economy, forcing widespread shutdowns and layoffs across nearly every industry.

NEW ORLEANS, La. (WWL-TV) — An audit of the Louisiana Workforce Commission’s distribution of unemployment benefits in 2020 found that more than $400 million went to about 97,000 people who shouldn’t have been able to claim unemployment in 2020. 

The state audit found $405.3 million in fraudulent or incorrect filings from January to September. 

The coronavirus pandemic was an unprecedented disaster for Louisiana’s economy, forcing widespread shutdowns and layoffs across nearly every industry.

Nearly 700,000 Louisianans filed for unemployment through September 2020, receiving more than $6.8 billion from state and federal unemployment programs. Filers in Louisiana received anywhere from $10 to $600 per unemployment check. 

The surge in unemployment claims, especially during the first months of the pandemic, swamped LWC’s ability to check records in a timely manner, leading to claims that slipped through the cracks. 

Employers are usually required to submit wage reports within 31 days after an economic quarter closes. But the legislature relaxed those rules during the pandemic, giving businesses extra time to submit them. Because of this, LWC wasn’t able to check eligibility for claims as they were filed. 

According to the audit, at least some of the money sent out improperly would have been saved if wage reports had been submitted on time. 

The pandemic also caused an uptick in the number of wage theft schemes identity theft cases, according to the LWC’s response to the audit. The agency was forced to shift the bulk of its resources to catching and stopping these crimes because they tend to result in higher monetary losses that are much harder to recover. 

LWC said they would continue looking into cases where people filed improper unemployment claims to see if they were the result of intentional fraud or accidental overpayments because the filer didn’t report the correct income. 

When fraudulent or overpaid unemployment payouts are found, the state agency tries to set up a repayment agreement with the filer to recover the money. If that fails, repayment can be taken from the filer’s paychecks until paid back in full. 

Anybody believed to have intentionally committed fraud will face a 25% penalty on top of the repayment. 

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