Some unemployed Michigan residents have been waiting months for their employment checks due to a fraud problem at the UIA. | Pexels
Some unemployed Michigan residents have been waiting months for their employment checks due to a fraud problem at the UIA. | Pexels
As the Michigan Unemployment Insurance Agency (UIA) continues to struggle with a backlog of claims that include some who have yet to receive any benefits, the agency is also dealing with problems in verifying claimants where there is suspected fraud.
Steve Gray, UIA director, recently told legislators that the UIA knows of 185,000 claimants with active claims who are not receiving any benefits, according to coverage by Bridge Michigan. He said the agency suspects 111,000 of those claimants are attempting fraud.
Out of 500,000 claims flagged for identity verification since the start of the pandemic, the agency has only decided that 128,000 were legitimate claims, according to Bridge Michigan.
The state has so far recovered $30 million in claims that it decided were fraudulent, and it is seeking another $45 million, according to Bridge Michigan. Gray told legislators that the $600 in additional weekly benefits that came through the federal CARES (Coronavirus Aid, Relief, and Economic Security) Act seemed to correlate to a spike in fraudulent claims, involving such methods as the use of false or stolen identities.
The agency has also made efforts to recover duplicate payments. Those amount to $1.3 million recovered by the third week of October, out of an estimated $8.2 million in duplicate payments made.
The agency also believes it has overpaid claims by approximately $6.6 million, according to Bridge Michigan.
The UIA has been troubled by the toll on the unemployment trust fund that has resulted from the economic crisis created by COVID-19 restrictions. While there had been $4.6 billion in the trust fund at the beginning of March, that amount had fallen to $1.5 billion by the end of August.
With the trust fund being funded by a tax on employee wages, having so much of the workforce continuing to draw from the fund rather than paying into it could deplete the fund completely, at which point the state would have to borrow money from the federal government to continue paying unemployment benefits.
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