IP Traced and Caught... Total Fraudulent Benefits Amount to 1.9 Billion KRW
Labor Ministry Orders Refund "Serious Crimes Will Be Prosecuted"
Fraudulent recipients who concealed reemployment or falsely claimed unemployment to receive unemployment benefits were caught. The total amount of fraudulent payments reached 1.91 billion KRW.
The Ministry of Employment and Labor announced that it conducted a special inspection on unemployment benefit fraud over three months from May to July and identified 380 fraudulent recipients.
Unemployment benefits are paid to insured workers who become unemployed while they engage in reemployment activities. Recipients must appear at the employment center at designated times or confirm their unemployment status online to continue receiving benefits.
Mr. A, residing in Gyeongnam, reemployed while receiving unemployment benefits but falsely claimed to still be unemployed, fraudulently receiving 17 million KRW. Mr. B from Jeonbuk also reemployed during benefit receipt but colluded with his employer to report that his spouse, not himself, was employed, receiving 15 million KRW.
The special inspection analyzed Internet Protocol (IP) addresses used during online unemployment recognition applications and focused on investigating duplicate recipients of large payments. The Ministry analyzed the IPs of 761 suspected non-reporters of employment and identified 249 fraudulent recipients. The fraudulent amount totaled 1.57 billion KRW.
Previously, both Mr. A and Mr. B applied for unemployment benefits using the IP addresses of their reemployment workplaces, which led to their fraud being uncovered during the IP address analysis.
There were also cases where recipients were caught receiving both large payments and unemployment benefits simultaneously. There were 131 fraudulent recipients, with a total amount of 340 million KRW. Large payments are a system where the government pays a portion on behalf of employers in case of delayed wage payments and cannot be received concurrently with unemployment benefits.
The Ministry ordered the return of a total of 3.62 billion KRW, including additional recoveries, and prosecuted 217 individuals deemed to have committed serious crimes such as high-value fraud by referring them to the prosecution with indictments.
From this month until the end of the year, the Ministry plans to investigate whether others applied for unemployment recognition on behalf of overseas residents. The target group includes 1,850 recipients whose unemployment recognition dates overlapped with their overseas stay last year.
According to the Ministry of Employment and Labor’s Employment Insurance Fund settlement report, over the past five years, more than 100,000 workers have received unemployment benefits three or more times. However, as repeat and fraudulent recipients exploiting loopholes in the unemployment benefit system increase annually, calls for system improvements continue.
In Korea, the qualifying period for job-seeking benefits (18 months of employment before unemployment) and contribution period (at least 180 days worked) are relatively short, making repeated claims easier. The minimum benefit amount is also high at 80% of the minimum wage compared to OECD member countries.
Accordingly, the government, ruling party, and business community argue for lowering the minimum job-seeking benefit amount to about 60% of the minimum wage or abolishing it altogether. Alternatively, there are opinions to extend the qualifying periods to 24 months (qualifying period) and 12 months (contribution period), similar to Japan or Germany.
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