News

California’s EDD is Falling Behind in Legitimate Unemployment Claims

According to a report by Calmatters, California’s Employment Development Department is lacking behind in finding legitimate claims for unemployment benefits. They claim that EDD has not played a real role than just thousands of bureaucrats giving out insurance benefits which itself has turned out to be a disaster due to the massive fraudulent activities.

According to a deep analysis of the fraud scandal by the LA Times, “EDD had failed to adopt precautions implemented in other states, including using sophisticated software to identify suspect applications, keeping Social Security Numbers out of official mail and cross-checking benefit claims against personal data on state prison inmates.”

This fraud scandal is extremely embarrassing for the Governor of California as the agency was already in a lot of trouble for failing to operate timely regarding the payments to thousands of legitimate claimants and is still struggling with a huge backlog of claims that are yet to be processed. EDD’s director Sharon Hilliard has been replaced by Rita Saenz.

EDD has halted the payments to stop the fraud that broke out as the result of Congress putting billions of dollars into the system of unemployment insurance for those affected by the COVID-19 pandemic. 

The agency tweeted on Sunday, “As part of ongoing efforts to fight fraud, EDD has suspended payment on claims considered high risk and is informing those affected that their identity will need to be verified starting this week before payments can resume.”

Previously, state Auditor, Elaine Howle, has warned that EDD is exposing the people to the threat of identity theft by placing the SSN number in the mail. However, EDD has ignored all the warnings. In 2020, the state paid up to $100 billion in benefits resulting in more than $20 billion in unemployment funds. EDD projects can end in a negative balance of $50 billion in 2021. The state took years to repay its debt of $10 billion and now it might face a debt of $50 billion.