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Just 35 Percent Of Americans Cash In On Jobless Benefits

Source: http://www.businessinsider.com/jobless-unemployment-st-louis-fed-claims-rarer-than-overpayments-2012-10

Among consumers eligible for unemployment benefits, just over one-third actually bother to cash in on average, according to new data from the  Federal Reserve Bank of St. Louis. 

The data applies to the last 22 years (1989 to 2011), save for during the recession, when elligible claims rose to 50 percent.

The findings are key for a couple of reasons.

Back in July, CNN Money cited data that showed that the Dept. of Labor had overpaid jobless claims by no less than $14 billion in 2011. In 2009, it was estimated that 11 percent of all claims were overpaid, for a total of about $11 billion. 

But since so many elligible workers are actually leaving their cash on the table, the agency should be more than capable of making up for lost funds.

For example, the 50 percent of workers who didn’t apply for benefits in 2009 saved the government an estimated $108 billion.

That’s more than 10 times as much cash the Dept. of Labor said was wasted on overpaying benefits the same year

There’s no denying overpaying jobless benefits is a problem –– most of them wind up in the hands of prisoners, identity thieves, retirees, and current workers –– but the report at least helps put that shortcoming into perspective.

Fraud is responsible for just 3 percent of all benefits paid, the Fed found, while eligible consumers leave seven times that much cash on the table by not applying for benefits.

And overpayments are beginning to slowly improve. The Department of Labor reported a 0.35 percent drop in overpayme! nts betw een July 2010 and 2011, and a 0.4 percent drop in errors caused by people who didn’t register their employment status with their state’s labor department.

The BLS put together a map of each state’s improper payment history in 2011, when overpayments topped $14 billion:

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