Definition: Defining the Meaning of Disability Benefit Fraud
Disability Benefit fraud is the receipt of payment(s) intended for the disabled from a government agency or private insurance company by one who should not be receiving them or the receipt of a higher amount than one who is entitled to them should be receiving. These include feigning a medical problem in order to be declared disabled, exaggeration of an existing medical problem that potentially can but in reality does not render the person disabled, continuing to receive payments after having recovered from a medical problem, or continuing to receive payments while working (usually unreported) above the allowable level for those receiving the payments.
Social Security benefits including Welfare, Pensions and Disability Insurance systems, which are supposed to support seniors, the unemployed, and persons with a disability, are often abused by cheats.
Benefit fraud is when people deliberately fail to report a change in their circumstances or lie in order to claim disability payments, welfare, housing and/or tax benefits that they might not otherwise be entitled to. All benefit fraud is a crime.
According to a White House, improper Social Security payments of all kinds, from criminal fraud to clerical errors, cost Americans a total of $110 billion in 2009.
Disability benefits represent Social Security's fastest-rising costs, increasing from 10 percent of all Social Security costs in 1990 to more than 18 percent today.
Americans shell out $135 billion every year to fund the federal disability system for 8.7 million participants. Both numbers are rising because new rules make it easier to qualify for disability benefits.
For every person caught ripping off the U.S. Social Security disability program, hundreds more get away with it. The National Bureau of Economic Research finds that disability payments and services are worth more than $300,000 over a recipient's lifetime.
According to a government group leading the charge for reform of the Social Security Disability Insurance system, more than half of the new Social Security disability claims are based on mental or musculoskeletal disorders. Such claims are fairly easy to fake, difficult to diagnose and hard to disprove, creating an easy opening for disability benefit cheats.
If Caught, Persons proved guilty of benefit theft may face:
- A fine
- A criminal record
- A community order
- Prosecution through the courts
- Being named and shamed in the local media.
- A prison sentence, or suspended prison sentence
- Having to pay back all the money they have illegally claimed in full as well as any court costs that have been incurred
Reporting a Social Security Benefit Cheater:
Social Security, and equivalent welfare offices in other countries, take hundreds of calls in confidence everyday from people reporting suspected benefit thieves.
If you suspect someone may be receiving a benefit they may not be entitled to, you can make an anonymous complaint at your local Department of Social Security so they can investigate and take appropriate action.
You can contact the agency via its website or by telephone, or visit your local Social Security office in person.
You will suffer no legal consequences as long as you made the complaint in good faith.
Quick Facts: Detecting Benefit Fraud
Disability fraud can be harder to detect than other forms of fraud, as the majority of people receiving disability payments (at least 90%) do not use a wheelchair or walker, while at the same time, many people who need wheelchairs would not qualify for disability payments. Since most disabilities are "invisible" (meaning that they cannot be seen by others), it is not easy to visually determine if a person receiving disability is not disabled.
Statistics: Disability Benefit Fraud
The U.S. Department of Labor reported that 1.9% total UI payments for 2001 was attributable to fraud or abuse within the UI program.
The Los Angeles Times reported in 2010 that twenty-four percent of new welfare applications in San Diego County contain some form of fraud which was determined to in fact include all forms of inaccuracy rather than just fraud.
A UK State of the Nation report published in 2010 estimated the total benefit fraud in the United Kingdom in 2009/10 to be approximately £1 billion. Figures from the Department for Work and Pensions show that benefit fraud is thought to have cost taxpayers £1.2 billion during 2012-13, up 9 per cent on the year before.