Young, Senate Republicans Introduce Legislation To Recover Hundreds Of Billions In Unchecked Unemployment Fraud

Senator Todd Young (R-Ind.), Senate Finance Committee Ranking Member Mike Crapo (R-Idaho), and a group of Senate Republicans reintroduced legislation to help recover funds lost to unemployment insurance (UI) fraud and provide incentives for states to recover fraudulent payments. The introduction of the legislation follows ongoing concerns that just a sliver of the funds lost to misspent unemployment insurance has been recovered—slightly over $5 billion of an estimated $191 billion.

“Pandemic unemployment programs were created to assist taxpayers during unprecedented times, not cause them to pay billions of dollars after the pandemic ended,” said Senator Young. “This legislation is critical for both protecting taxpayers from fraud and reclaiming funds that were misspent.”

“Improper payments in pandemic unemployment programs left taxpayers on the hook for hundreds of billions of dollars,” said Senator Crapo. “This legislation will help gain restitution for victims of fraud and theft by jumpstarting efforts to claw back federal funds and recover fraudulent payments.”

The Protecting Taxpayers and Victims of Unemployment Fraud Act would advance efforts to claw back federal funds stolen through UI fraud and pursue recovery of fraudulent payments by ensuring aggressive identification, investigation and prosecution of criminal fraud in pandemic unemployment programs.  It also gives the federal government and states better tools to detect and prevent future fraud in federal UI programs.  The U.S. House of Representatives, led by House Ways and Means Committee Chair Jason Smith (R-Missouri), today passed a companion bill (H.R. 1163).

More specifically, the Protecting Taxpayers and Victims of Unemployment Fraud Act would:

• Allow states to keep 25 percent of recovered fraudulent overpayments of federal funds.
• Allow states to use recovered funds to improve program integrity and fraud prevention.
• Allow states to keep 5 percent of state UI overpayments, conditioned on meeting data matching integrity conditions, and dedicating those funds to preventing future fraud.
• Extend the statute of limitations for criminal charges or civil actions from 5 to 10 years.