What is Unemployment Fraud?

Unemployment fraud occurs any time an individual filing for unemployment benefits knowingly misreports information or fails to comply with the terms of the unemployment payments.

Examples of Unemployment Fraud

There are three common methods of unemployment fraud: providing false information on an application, not complying with requirements to actively seek work and failing to accurately report income. If you provide the wrong name, social security number of employment information on an application, your application is fraudulent. Once you are approved for benefits, you have to continually look for a job if you are able. Failure to do so is fraudulent. Finally, if you do earn income, you must report this income.

Consequences of Unemployment Fraud

If you commit unemployment fraud, you have to repay all of the payments you received as a result of your unemployment benefits. In extreme cases where a lot of money was distributed or you have been found guilty of fraud more than once, you may be criminally prosecuted. This would result in a permanent criminal record, possible jail time and a number of other fiscal penalties. Avoiding unemployment fraud is as simple as obeying the law, telling the truth, and looking for a new job instead of relaxing on unemployment checks.

Is it fraud to receive retirement and unemployment?

You commit unemployment fraud if you are collecting payments but not actively looking for a job. In order to collect the benefits, you must be active and willing to work but unable to find a job. If you have voluntarily retired and are not seeking employment, you cannot collect unemployment benefits. However, if your employer forced you into retirement, you may collect unemployment benefits at the same time you collect retirement benefits. You must actively seek work during this period to remain eligible, and your benefits may expire faster than if you were not collecting retirement benefits. 

Are tax returns used to detect unemployment compensation fraud?

Your tax returns may absolutely be used in order to audit whether you have committed any form of unemployment fraud. In order to be eligible for unemployment insurance, you must meet a very specific set of criteria: you must have been terminated unwillingly from your last employment, you must be seeking a new job, you must be willing and able to work, and you must not be earning compensation from any other source. If you file a tax return showing income you did not report when you filed for unemployment insurance, you may be charged with unemployment fraud. 

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