The state of Ohio overpaid more than $2 billion in unemployment benefits to hundreds of thousands of Ohioans during the pandemic and a significant percentage of that money went to fraudulent claims.
Ohio Department of Job and Family Services interim director Matt Damschroder said the $2.1 billion in overpayments in from March 2020 to February 2021 includes the federal pandemic unemployment compensation (FPUC), which came as weekly benefit checks of $600 and then $300.
Fraudulent claims for traditional unemployment accounted for $21 million of the overpayments. Fake claims for federal pandemic unemployment assistance (PUA) for workers who didn’t qualify for traditional unemployment totaled $441 million.
In February, the state had estimated it paid out $332 million in fraudulent jobless claims for the last three months of last year. Most of that was in the PUA program, and Ohio Department of Job and Family Services said other states were getting targeted by scammers.
This year, the agency said fraudsters were hitting the traditional unemployment program. More than 185,000 claims were flagged for fraud starting at the end of January through the middle of April.
“It is clear that widescale fraud and overpayments have been experienced nationwide during this global pandemic," Damschroder said. "No state has been immune.”
The bulk of the overpayments were not for fraudulent claims, though.
During the pandemic, $1.6 billion was paid in nonfraudulent claims. That included $457 million paid in the traditional unemployment program and $1.2 billion in the PUA program.
The state has paid more than $9.8 billion in unemployment compensation payments to over 997,000 Ohioans in the traditional unemployment program, and another $10.8 billion in federally-paid PUA to over a million people in that non-traditional program.
Damschroder said his agency is working on coming up with waivers for at least some of those who received the $1.6 billion in non-fraudulent overpayments, so they might not have to pay that money back.
"That policy must align with federal law and guidance, some of which was only issued recently. This may allow us to establish blanket waivers to individuals who have been overpaid through no fault of their own in certain circumstances," Damschroder said.
Damschroder said a public-private partnership team created to clear the backlog of claims has gotten through all the non-fraudulent claims from 2020, and should have the 2021 backlog cleared in a few weeks.
Damschroder also said the state has borrowed $1.47 billion from the federal government to pay traditional unemployment benefits during the pandemic. That loan is expected to be repaid with federal COVID relief dollars from the American Rescue Plan.
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