Tennessee is receiving another round of federal funding to improve the behind-the-scenes functioning of its unemployment benefits system, including to better detect and combat fraud.
Federal labor officials say identity fraud spiked when the coronavirus pandemic rapidly expanded benefits, prompting multiple rounds of grants to states. The money is also supposed to help with the broader umbrella of “overpayments,” many of which aren’t related to fraud. Many factors go into calculating how much money an unemployed worker can receive. Audits can turn up issues, workers and companies sometimes haggle during appeals, and some recipients simply fail to alert the state’s labor department once they do go back to work.
In 2020, Tennessee made $32.5 million in overpayments. That’s far more than the year before the pandemic ($12.6 million). But it’s also a much smaller fraction of all the benefits paid out — more than $5 billion — as unemployment needs and filings ballooned.
Earlier this year, Tennessee received more than $2 million to work on securing its unemployment system. The latest federal grant is nearly $3.7 million.
The state’s labor department declined to share specifics about how the funds will be used, citing security concerns.
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