Government Unemployment Insurance Fraud

Government unemployment insurance is regulated strictly by each state in order to prevent fraudulent claims. The most common unemployment insurance fraud may be when someone collects benefits that they are not owed under unemployment insurance law. This could mean continuing to collect unemployment insurance benefits once you have started working again or that you did not accurately report any income you earned outside of your normal line of work while you were collecting benefits.

• State unemployment agencies keep close tabs on the proof you submit to show your earnings and employment status. Each state works with other agencies to verify that your information is accurate and up to date. For example, state offices of unemployment get data on new hires from the state's department of revenue.
• When you begin a new job and submit your tax information, your employer submits this information to the government. By checking in with the department of revenue, state offices of unemployment can see what new employees are receiving taxable income. In many states you lose your eligibility to collect benefits on your first day at work.
• State departments of revenue also provide unemployment agencies with information on any income you receive from part-time work while you are receiving unemployment. This insures that everyone is receiving the proper amount in his or her unemployment check.

Punishment for fraudulently collecting unemployment insurance benefits from the government can vary. Generally, you will need to pay back any unemployment you received that you were not technically eligible for. You may also be required to pay interest on this amount and lose your eligibility to receive unemployment benefits again.

The state government has many ways to ensure that you pay back benefits to which you were not entitled. The state might garnish your wages or keep your income tax refund. Some states also have the ability to take other assets you have as a means to recoup money that was fraudulently paid as unemployment benefits. In the most serious of cases, unemployment insurance fraud is punishable with jail time. Employers who fail to pay the unemployment tax on their workers can also be prosecuted for unemployment insurance fraud and may face fines or other consequences.

As long as you follow the guidelines set by your state's office of unemployment, you will not have to deal with the burden of repaying benefits that you were not supposed to receive.