Reporting Social Security Fraud and Disability Benefit Cheats

Author: Disabled World (DW)
Updated/Revised Date: 14 Mar 2025

Contents: Synopsis - Introduction - Main - Publications - Subtopics

Synopsis: Information on Social Security, pensions, and disability benefit fraud, including how to report welfare benefit fraud.

Benefit fraud is when people deliberately fail to report a change in their circumstances or lie to claim disability payments, welfare, housing, or tax benefits that they might not otherwise be entitled to.

Introduction

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.

Main Content

What is Disability Benefit Fraud?

Benefit fraud is when people deliberately fail to report a change in their circumstances or lie to claim disability payments, welfare, housing, or tax benefits that they might not otherwise be entitled to.

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 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.

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

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 many disabilities are "invisible" (meaning that they cannot be seen by others), it is not easy to visually determine if a person receiving a disability payment is not disabled.

Reporting a Social Security Benefit Cheater

Social Security, and equivalent welfare offices in other countries, take hundreds of calls in confidence every day 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 to 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 sincerely.