The Labor Department’s inspector general flagged $45.6 billion in unemployment benefits as potentially fraudulent, and a new federal rule built on that number will open state jobless-claim files to federal investigators. The figure comes from a September 21, 2022 alert memo signed by Carolyn R. Hantz, the inspector general’s Assistant Inspector General for Audit. It covers benefits paid between March 2020 and April 2022, during the pandemic.

The money was paid out by state agencies, and the claim records that could show where it went belong to those states. Anyone who has ever filed for unemployment has a file in one of those state systems. The Labor Department’s final rule, published September 16, 2026, requires states to share that confidential claim information with federal overseers, including the department’s inspector general and the Government Accountability Office.

The rule takes effect November 16, and states have until September 16, 2027 to change their laws to match it.

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The four areas behind $45.6 billion

The 2022 memo breaks the $45,639,490,607 total into four groups of claims that the inspector general’s office considered high risk. Multistate claimants, people who filed in more than one state at once, account for $28,967,047,154. Claims tied to suspicious email accounts account for $16,265,578,304. Claims filed under the Social Security numbers of federal prisoners add $267,382,013, and claims filed under the numbers of deceased people add $139,483,136.

Those four lines add up to the $45.6 billion headline. The federal prisoner figure was carried over unchanged from an earlier report, because the inspector general’s office did not have newer data to update it.

The Labor Department’s rule describes the $45.6 billion as spread across six high-risk areas. The inspector general’s own unemployment oversight page lists six categories, adding claims under the numbers of children under 14 ($1,225,663,851) and people 100 or older ($66,541,872), but with all six it totals about $46.9 billion, not $45.6 billion. The $45.6 billion figure belongs to the four-area memo.

Potentially fraudulent is not proven fraud

The inspector general’s wording is “potentially fraudulent,” and it matters. The memo flags claims that match a risk pattern, such as a Social Security number belonging to someone who has died. A flag is a reason to investigate, not a finding that every dollar was stolen.

A separate and larger number sits next to it. The inspector general’s office has estimated that at least $191 billion in pandemic unemployment payments could have been improperly paid. It reached that figure by applying an improper-payment rate of 21.52 percent to roughly $888 billion in pandemic unemployment spending. Improper payments include mistakes and overpayments as well as fraud, so the $191 billion and the $45.6 billion are measuring different things.

Why the inspector general wanted the data

The 2022 memo did more than total up the flags. It told the Employment and Training Administration, the Labor Department office that oversees unemployment insurance, that the inspector general needed ongoing access to state claim data. It made three recommendations: require states to give the inspector general continuing access, and amend two federal regulations, 20 C.F.R. 603.6(a) and 603.5(i), to make those disclosures mandatory.

The inspector general’s oversight page says the main barrier to that access has been the Labor Department’s own reading of its regulations. It also recommends that the department collect state unemployment records directly from state agencies going forward.

The 2026 rule puts the data sharing in writing. It requires states to disclose confidential unemployment compensation information to federal overseers, and the Labor Department cites the inspector general’s finding of $45.6 billion in potentially fraudulent benefits in explaining why.

What changes for states and claimants

For state unemployment agencies, the rule sets two dates. It becomes effective on November 16, 2026, and states must have their own laws in line with it no later than September 16, 2027. The Labor Department’s rule sets the deadline, and each state’s legislature decides how its own law changes.

For people who file for benefits, the rule names its recipients: federal overseers, including the Labor Department’s inspector general and the Government Accountability Office. It covers confidential claim information that state agencies hold.

Following the unemployment fraud numbers

The inspector general’s office posts its unemployment work on its website, in an oversight section for the unemployment insurance program that carries the 2022 memo and its later tables. A reader who sees a bigger or smaller fraud number in the news can check it there. The first question is whether the number counts potential fraud, confirmed fraud or all improper payments, and the second is which years it covers.

Anyone who files for benefits in the coming year can expect the state agency to be the place to ask about a claim, a denial or a letter about benefits that were never requested. The state is also where the new data rules will be written into law, so a state’s unemployment agency or legislature is where the 2027 changes will show up first.

The dates to watch are November 16, 2026, when the rule takes effect, and September 16, 2027, when states must be in line. The rule itself, in the Federal Register, is the source for both.

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This article was produced with AI assistance and edited for accuracy against the sources linked above.