[2021 National Audit] Colluding with Employers to Falsely Claim "Voluntary Resignation"... 120,000 Cases of Unemployment Benefit Fraud Over 5 Years, 17% Unrecovered

The total amount of fraudulent claims over 5 years is 214.3 billion KRW... Recovery rate is 83%

Concerns are rising that the Employment Insurance Fund's finances may be depleted. On the 6th, the Seoul Employment Welfare Plus Center in Jung-gu, Seoul. Photo by Moon Honam munonam@

[Sejong=Asia Economy Reporter Moon Chaeseok]

#Worker A reported to the employment center that he lost his job and received 17,292,000 KRW in unemployment benefits. In reality, A worked at three different workplaces while receiving unemployment benefits. He received wages from the companies while also collecting unemployment benefits meant for the unemployed. The Ministry of Employment and Labor was only able to recover 5,764,000 KRW from A.

#Worker B colluded with his employer to claim unemployment benefits. B fabricated a story that he was laid off due to the company's poor management and received 17,820,000 KRW in unemployment benefits. B intended to receive both the company salary and unemployment benefits, while the employer saw this as a way to reduce labor costs. The Ministry of Employment and Labor was only able to recover 11,880,000 KRW out of the 35,640,000 KRW ordered for return.

Cases of fraudulent unemployment benefit claims through false job loss reports or disguised resignations have reached 120,000 over the past five years. It has also been pointed out that the recovery rate of fraudulently claimed unemployment benefits has been decreasing every year.

Source: Office of Yoon Joon-byung, Democratic Party of Korea

On the 6th, Yoon Junbyung, a member of the Environment and Labor Committee of the National Assembly from the Democratic Party, revealed this based on data submitted by the Ministry of Employment and Labor before the National Assembly’s Environment and Labor Committee audit. The data contains the "Annual Unemployment Benefit Fraud Cases and Recovery Status from 2017 to July 2021."

During this period, the total number of fraudulent unemployment benefit cases was 121,849. There were 33,588 cases in 2017, 25,575 in 2018, 22,005 in 2019, 24,262 in 2020, and 16,419 up to July 2021.

The amount decided for recovery due to fraud was 58.517 billion KRW in 2017, 40.353 billion KRW in 2018, 40.312 billion KRW in 2019, 44.140 billion KRW in 2020, and 31.05 billion KRW from January to July this year, totaling 214.291 billion KRW over five years.

Source: Office of Yoon Joon-byung, Democratic Party of Korea

Among the detected fraud cases, failure to report employment was the most frequent with over 113,600 cases (totaling 93 billion KRW) over five years. Proxy unemployment recognition, such as someone other than the beneficiary attending, accounted for 4,369 cases (58.9 billion KRW). False reporting of reasons for job separation, such as claiming a voluntary resignation as a layoff, reached 1,657 cases (44.7 billion KRW). In one case, a beneficiary colluded with the employer to falsely report the reason for separation as a layoff due to business difficulties and fraudulently received 17.82 million KRW, but only 11.88 million KRW was recovered.

The amount of fraudulent claims continues to increase, but the recovery rate remains at 83%. It has been revealed that a total of 36.496 billion KRW has yet to be recovered to date.

Rep. Yoon said, "17% of the unemployment benefit amount has still not been recovered, further exacerbating concerns about the depletion of the unemployment benefits and employment insurance fund." He added, "Efforts must be made to ensure that unemployment benefits and employment insurance funds are used appropriately, and effective recovery measures for fraudulently claimed unemployment benefits should be established to strengthen the financial stability of the employment insurance fund."

This content was produced with the assistance of AI translation services.