New York lost at least $11 billion in overpaid unemployment during pandemic, DiNapoli says

New York lost at least $11 billion in overpaid unemployment during pandemic, DiNapoli says

An workplace of the New York State Comptroller report on the state unemployment insurance system through the COVID-19 pandemic finds that the system was sadly unprepared to deal with the amount of claims within the spring of 2020, when all of it got here to a halt, and paid out at the least $11 billion in overpayments.


In an interview, Controller Tom DiNapoli mentioned the system had a historical past of points. He mentioned his workplace found in 2015 that the state pc system that checked IDs and distributed unemployment advantages was outdated. He additionally mentioned the division, then a part of former Governor Andrew Cuomo’s administration, was “very sluggish to implement upgrades.”

And through the pandemic, the system broke down, he mentioned.

On the time, many New Yorkers complained that they might not attain the division to even apply for advantages, both on-line or by cellphone.

The audit discovered that when the cash got here out, there was poor accountability and even outright fraud dedicated in opposition to the division, leading to a lack of at the least $11 billion.

DiNapoli mentioned it was tough to find out the precise quantity as a result of, he mentioned, ministry officers had been sluggish to offer his auditors the knowledge they wanted and, in some circumstances, didn’t. not supplied in any respect.

“They dragged their ft to reply,” DiNapoli mentioned. “And fairly often they would not reply.”

Whereas some New Yorkers had been overpaid by way of no fault of their very own, others engaged in fraudulent actions that DiNapoli mentioned had been simple to perform below the division’s outdated system for verifying identification.

“The vulnerability of the system to fraud is basically very regarding,” he mentioned.

DiNapoli mentioned the state is now working with the federal authorities to attempt to get better a number of the cash.

“Clearly a whole lot of work must be executed there,” DiNapoli mentioned.

New York additionally needed to take out an $8 billion mortgage from the federal authorities to fulfill reputable unemployment insurance coverage funds. State employers should repay this mortgage, by rising unemployment insurance coverage contributions.

Issues with the state unemployment insurance coverage system existed below the Cuomo administration, however Cuomo resigned in shame in 2021. Governor Kathy Hochul was elected to a full time period final week, and DiNapoli mentioned that It was now as much as Hochul to scrub up the mess.

In a written response, the state Division of Labor faulted the comptroller for failing to consider the efforts of particular person employees whom it referred to as “unsung heroes”, working 10 to 12 hour days, seven days out of seven, on the peak of the pandemic.

“The COVID-19 pandemic has positioned unprecedented stress on unemployment insurance coverage programs nationwide. Regardless of this problem, our system has acted as a vital lifeline for almost 5 million New Yorkers,” says the letter, signed by Susan Filburn, Deputy Commissioner of Employment Safety.

The letter additionally blamed the federal authorities, which Filburn mentioned had “underfunded the modernization of unemployment insurance coverage packages throughout the nation, leaving outdated programs in place to ship unemployment advantages and battle unemployment advantages.” in opposition to fraud”.


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