Evening star., 1948-07-07
Jobless Compensation Hauds
More Funds Needed to Detect Claims Base on False
Statements by Benefciaries
By C.. A. Wharton
Director, District Unemployment Compensation Bod

AH CSIU, 0toLf ~ CHCHtPto
The District Unemployment Compensation
Board has collected from employers in the
District of Columbia the staggering sum OF
81 million (plus) dollars and has expended
only IA million (plus) for unemployment bene-
fits.
1t is difficult to single out and to discuss
any particular phase, activity or part OF the
program involved in the administration OF
the District Unemployment Compensation Act
because there are so many complexities and
problems all of which are contingent one upon
the other.
In this report by me as an administrator,
responsible alike to employers and employees in
the District of Columbia wish to stress that
a constant and continuous investigation carried
on by this board indicates that fraud does
exist No one associated with the program OF
unemployment insurance will deny that pay
ments have been made to persons who have no
right to them and who have made dishonest
representations in order to obtain them.
Because OF the publicity that inevitably fol-
lows when fraud is detected it is easy for the
general public to be led to believe that fraud
is widespread. Actually the extent to which
fraud is committed is largely 4 guess. The
Social Security Administration. has made
comprehensive survey and has estimated the
proportion of fraudulent claims filed ranges
from l to 2 per cent OF the total num-
ber of applications. Most improper payments
are made as a result of the deceptions prac-
ticed by some claimants, and If adequate funds
for administration were available more effec-
tive devices could be initiated by the unemploy-
ment board to reduce the number OF such
fraudulent claims to a minimum.
Limited Investigations.
In the District, as in many of the States
thorough and comprehensive investigations for
fraud have not been undertaken due to lack
Of administrative funds However, in attempt
ing to reach definite conclusions about the
extent Of fraud, the primary purpose Of the
unemployment insurance program must be
considered. That is, to pay benefits to work.
ers who are unemployed through no fault OF
their own in order to effectively bridge the
gap between jobs. Therefore, 1t is obvious
that payments must be made as soon as posi-
BILE after the worker becomes unemployed. To
suspect each claim that Is filed, and to delay
each payment until q thorough investigation
has been completed, would not only defeat
the primary purpose OF the program, but would
impose an unwarranted hardship on the vast
majority Of honest claimants, as well as being
administrativey and economically unsound.
In considering fraud within the unemploy-
ment insurance program, it is OF prime
importance that q careful distinction be made
between deliberate dishonesty and innocent
mistakes made by claimants as q result Of the
complexities OF various laws shall deal here
with willful and deliberate fraud. The avenues
open to a claimant who Is bent on getting
benefits to which he Is not entitled are many
and the problems connected with detection OF
such deceptions are most difficult to overcome
Deliberate fraud manifests itself IN many
FORMS In order to obtain benefits, claimant
NAV state that he is unemployed when, in fact
he is employed Or he may certify that he did
not earn any money during the week for which
he is reporting when he actually had part
time job. He may state that he is available
for work" and seeking job but may subse-
quently refuse job that is suitable in all
respects. physically incapacitated claimant
may certify that he is able to work, while an
other claimant will unblushingly state that he
is receiving no income from other sources
when in truth, he is The claimant may report
to the board that he was separated from his
last lob because of lack of work when in reality
he voluntarily quit or was fired for misconduct
and should be disqualified The claimant may
apply for benefit under more than one name
or under more than one social security number,
or he may file fraudulent claim by conspiring
with an employer to supplement low wages.
Hard to Check Job Status.
The numerous nonmonetary factors inherent
In the law which must be considered In deter
mining eligibility present, perhaps, the biggest
problem. The financial factor . wage credits
in covered employment Is easily COPIED
with in determining eligibility but the nom
monetary elements involved in making proper
determination are not always ascertainable at
the time a worker files a claim. Unless a
representative Of the Unemployment Board
follows each claimant as he leaves the ONCE
it is impossible Immediately to tell whether
the claimant is working at the time he applies
for unemployment benefits In most cases. he
is investigated after he has received payments
Every applicant for unemployment Dement'S
Is asked, Are you available for work?" He
must give an Affirmative reply If he is to re-
ceive his weekly benefit check. Despite his
afnrmative reply, conditions may exist which
would preclude his acceptance of work If
offered to him. To be available for work
claimant must also be willing" to accept
lob If and when it is offered to him. 1t is
most diflcult to prove that he is not willing"
when he has gone through the formality OF
registering for a job.
Each applicant is also asked, "Are you
physically able to work." Knowing that this
is q prerequisite to eligibility for benefits. he
may answer Eyes" when in reality there exists
physical factors which make him unemployable.
Yet, to require doctors certificate on each
visit would unjustinably impede the processing
of claims and work financial hardship on the
unemployed honest worker.
Each applicant is required to report his>so-
cial security number as well as his name. After
filing a claim, an individual with fraudulent
intentions may obtain another social security
number by using an assumed name and, thus,
while drawing weekly unemployment payments,
he may be receiving wages from an employer
to whom he has given a fictitious name ana
an erroneous social security number. The fact
that this practice may deprive him OF future
retirement benefits under the Social Security
-. ,,aa.. into him much an In