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Many Jobless Workers Fail to Claim Their Benefits

Many Jobless Workers Fail to Claim Their Benefits

Many unemployed workers aren't cashing in on all of the benefits they're eligible for, new research finds.

The study discovered that only 63 percent of the unemployed who are eligible for benefits in the U.S. have collected them over the past 22 years.

While previous studies have highlighted the unemployment benefits that were overpaid, Concordia University professor David Fuller's research shows that uncollected benefits represent a much larger dollar figure than overpayments. Based on the U.S. unemployment insurance system's expenditures from 1989 through 2011, overpayments represented less than one-tenth of the benefits paid, compared to unclaimed benefits, which were nearly seven times the overpayments.

"If all of those who are eligible for unemployment benefits were to start collecting those benefits, as could easily happen if the U.S. continues to have high unemployment, the additional expenditures could be massive," Fuller said.

The professor believes the financing structure in the U.S. contributes to the uncollected benefits.

"In the U.S., benefits are financed by taxes levied on firms," he said. "So the firm you work for essentially pays for your benefits."

A more efficient system is the one used in Canada, where workers finance unemployment benefits via a payroll deduction,  Fuller said.

"That means that Canadians might be inherently more inclined to take advantage of a system that they are directly helping to maintain," Fuller said. "I expect that more unemployed Canadians collect just due to the differences in financing."

With economic uncertainty persisting, Fuller contends that his research should sound warning bells for governments and corporations to be prepared for the possibility of a significant increase in those cashing in their unemployment benefits.

The study was co-authored by Concordia assistant professor Damba Lkhagvasuren.

Follow Chad Brooks on Twitter @cbrooks76 or BusinessNewsDaily @BNDarticles. We're also on Facebook & Google+.

Chad  Brooks
Chad Brooks

Chad Brooks is a Chicago-based freelance writer who has nearly 15 years experience in the media business. A graduate of Indiana University, he spent nearly a decade as a staff reporter for the Daily Herald in suburban Chicago, covering a wide array of topics including, local and state government, crime, the legal system and education. Following his years at the newspaper Chad worked in public relations, helping promote small businesses throughout the U.S. Follow him on Twitter.