Are The Wealthy Abusing Government Aid?

Unemployment benefits for millionairesMany conservatives have accused unemployment insurance of creating a population of slacker, couch-bound stoners (several states have made drug tests a requirement of benefits). But an analysis by Bloomberg has found that the ultimate pinnacle of hard work and success -- millionaires -- raked in almost $80 million in jobless benefits during the recession.

At its 2010 peak, the country paid out $150 billion in unemployment benefits, according to the Congressional Budget Office. And $29.9 million of that went to millionaires, according to Bloomberg. That year, almost 3,200 households that reported an adjusted gross income of more than $1 million received unemployment benefits, with an average take of $12,600. That's 56 percent more than the $8,050 received by the average household filing for benefits, unsurprisingly so since jobless insurance is hitched to past salary.

Thirty-three households earning more than $10 million also got a helping hand from our jobless safety net, with an average haul of $11,455. A quarter of those millionaire homes getting benefits were in California, and a further 19 percent were in New York.

Is This An Abuse?
A 42-year-old waiting outside the unemployment office in Harlem, N.Y. was at first shocked when the Bloomberg reporter told him how many millionaires were also getting that weekly check. "I'm not a millionaire!" said Clark James. "But if you've paid taxes for it, why shouldn't you collect the money? And going from $1 million a year to $405 a week -- that's a big drop."

More: The Real Unemployment Rate Is Worse Than You Think

Unemployment insurance isn't means-tested, because it is an insurance, paid by employees and their employers with a cut to every paycheck. And the vast majority -- 68 percent -- of insurance payments go to households earning less than $50,000 a year, Bloomberg reported.

But even far more affluent Americans can end up in free fall when a livelihood is lost, especially since they likely have higher costs, such as private school tuitions. The film "Hard Times: Lost on Long Island" followed several families who suddenly lost a six-figure paycheck, and end up driving down to the church's food bank in a fancy sports car to pick up dinner.

But still, it can be hard to stomach the idea of millionaires cashing in on a system designed to keep the unfortunate afloat, especially as so many Americans brace for major sequester-related cuts to their unemployment checks.

Ultimately, however, it isn't millionaires, but the millions of middle and working class Americans, who are stretching the unemployment insurance system to breaking point. As Gary Burtless, a senior fellow at the Brookings Institution in Washington, pointed out to Bloomberg, just 0.035 percent of the 9.2 million Americans receiving jobless benefits in September 2010 made a million bucks that year.

And making millionaires ineligible for unemployment benefits would be an enormous undertaking. As the Congressional Research Service noted in a report last year: "The potential administrative costs [of disqualifying wealthier Americans from unemployment insurance] could outweigh the potential savings."

Don't Miss: Companies Hiring Now

Related Stories

Looking for a job? Click here to get started.

Add a Comment

*0 / 3000 Character Maximum


Filter by:

HP why do you have repeat ews all the time? Get off your butts and go out and find us a freaking story you havent told already!! This is borning me.

April 11 2013 at 9:24 PM Report abuse rate up rate down Reply

%^^*&)(#@+_)!~~!!()(^%|})*?:""><&Y%%#$@@%&))__) THANKQ

April 08 2013 at 10:49 PM Report abuse rate up rate down Reply

if you make money you are an evil individual however if you don't work and receive money then you're a good person...that seems to be today's attitude.

April 08 2013 at 9:25 PM Report abuse rate up rate down Reply

Is the following a joke?: "At its 2010 peak, the country paid out $150 billion in unemployment benefits, according to the Congressional Budget Office. And $29.9 million of that went to millionaires"

So $30 Million out of $150 BILLION? Seriously? In other words, there is no problem, and millionaires are getting essentially no unemployment benefits, relatively speaking. Of course that would make for a boring, albeit honest, headline.

April 08 2013 at 8:51 PM Report abuse +1 rate up rate down Reply
Welcome King

Money controls all

April 08 2013 at 8:38 PM Report abuse +2 rate up rate down Reply
1 reply to Welcome King's comment

Actually your mind controls all, and your mind is perhaps wrapped up in envy or self-pity.

April 08 2013 at 8:59 PM Report abuse -1 rate up rate down Reply

They should be able to get the benefits if they are entitled. Maybe they will just give more to charity.

April 08 2013 at 8:32 PM Report abuse rate up rate down Reply
1 reply to twohuskins's comment

Yea, THAT'S gonna happen! lol

April 09 2013 at 12:42 PM Report abuse rate up rate down Reply

If you pay into the system, you should be able to draw from the system, PERIOD. You hear idiots talking about millionaires drawing social security when time and that they shouldn't be able to, I say BS. Again, they paid into it and now they're paying really BIG. If no one wants them to draw from a system, then they shouldn't have to pay into that system. The problem I have is those that have never paid a dime into ANY system but draw off of all of them & I'm not talking about children. Those are the ones that upset me.

April 08 2013 at 7:09 PM Report abuse +5 rate up rate down Reply
1 reply to David's comment

Hi David, I agree with you. Ask California school teachers who lost most of their Social Security benefits how it feels to have the government decide you that you are a double dipper and will not receive all of your Social Security benefits.

April 08 2013 at 7:25 PM Report abuse +1 rate up rate down Reply
1 reply to mzzcortezz's comment

Ask an old railroad worker who paid into the railroad retirement fund, held a second job and paid Social Security - and when he passed away before drawing on either one, his widow could collect only one or the other - Not allowed to collect two government checks - and one wasn't raised to compensate either- And because she wasn't 62 yet - she couldn't collect any compensation until then - Had to go to work - and by the time she could retire - she didn't live long enough to collect but for one year. That sucks.

April 08 2013 at 8:32 PM Report abuse +2 rate up rate down

Misleading and abusive title. Government Aid Abuse? Hardly. These people are entitled collect. Why not more articles about welfare and entitlement *fraud*? Oh right. That might make O's supporters look bad. We can't have that, can we?

April 08 2013 at 6:53 PM Report abuse +4 rate up rate down Reply

this is not abuse, unemploymet insurance is insurance not welfare. if a wealthy person got into an automobile accident and filed a claim with their insurance company would that be abuse? No, the articel clearly points out that this is not abuse.

April 08 2013 at 6:04 PM Report abuse +6 rate up rate down Reply

How is it, the wealthy are ABUSING govt aid, if the law allows them to receive said aid---LEAGALLY

If you do not like how the laws are, you need to work to change the laws---through legal channels----eg----like the House and Senate

Stop your whining----whine whine whine-------------you might try putting the effort used for whining into wokring at changeing the law

OH---there is that BAD word---WORK

April 08 2013 at 5:58 PM Report abuse +6 rate up rate down Reply

Search Articles

Picks From the Web