Ohio Overpaid $2.1 Billion In Benefits To Jobless Workers During Pandemic

The state of Ohio overpaid unemployment benefits by more than $2 billion to hundreds of thousands of Ohioans during the pandemic, including a significant amount to fraudulent claims.

Ohio Department of Job and Family Services Interim Director Matt Damschroder said the $2.1 billion in overpayments between March 2020 and February 2021 includes the federal pandemic unemployment compensation (FPUC), which came as weekly benefit checks of $600 and later, $300.

Payments to fraudulent claims for traditional unemployment totaled $21 million, he said. Another $441 million went to fake claims for federal pandemic unemployment assistance (PUA) for workers who didn’t qualify for traditional unemployment.

In February, the state estimated it had paid out $332 million in fraudulent jobless claims for the last three months of 2020. Most of that was in the PUA program, and ODJFS said other states were also targeted by scammers.

The state agency said this year, fraudsters have been 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 wide-scale fraud and overpayments have been experienced nationwide during this global pandemic," Damschroder said. “No state has been immune.”

The bulk of Ohio’s overpayments were not for fraudulent claims, though. Legitimate claims still saw $1.6 billion in errant payouts: $457 million though the traditional unemployment program and $1.2 billion via PUA.

The state has paid more than $9.8 billion in unemployment compensation to more than 997,000 Ohioans in the traditional unemployment program and another $10.8 billion in federally backed PUA to over 1 million claimants.

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.

The state has borrowed $1.47 billion from the federal government to pay traditional unemployment benefits during the pandemic, Damschroder said. That loan is expected to be repaid with federal COVID-19 relief funding from the American Rescue Plan.

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