Welfare and Benefit Fraud Statistics Show a Disturbing Pattern

For some reason, I’ve been getting a lot of questions and statements from people that feel that there is a tremendous amount of benefit or welfare fraud taking place.

Is there fraud in benefits systems? Without a doubt, I’m positive there is. But the level of welfare or public benefits fraud is a much-disputed figure. So to find out what the truth is, I went hunting for the facts.

There are many urban myths about the levels of benefit fraud, and I’m sure some will post hotly contested arguments in the comments about the levels of benefits fraud they have either witnessed or heard about.

First, let me state, if you are personally aware of anyone defrauding any benefit system, rather than complain about their actions, you should instead be reporting them to the benefits program. You have no excuse to complain about a system you leave broken until you do that.

What Do the Facts Tell Us?

In general, facts about welfare fraud are hard to come by, but those that can be found do not support widespread benefit fraud. For example:

Unemployment Insurance

Congressional testimony from 2002 stated that unemployment insurance fraud was 1.9 percent of all unemployment insurance benefits. – Source

Los Angeles Welfare Fraud

The Department of Public Social Services reports they handle about 1.5 million cases involving benefits. During the fiscal year 2004/2005, there were 60,634 reports of fraud, the department completed 52,930 investigations, and 425 people were convicted of welfare fraud. In addition, fraud or misrepresentation (not defined) was found in 10,789 cases.

The county reports that currently the level of found fraud or misrepresentation occurs on 5,000 to 8,000 cases. Based on current levels of aid, that represents about half of one percent of all cases. – Source, Source

Food stamp or SNAP fraud seems to exist at only relatively low measured levels.

Food Stamps / SNAP

According to 2011 data, the fraud rate for SNAP (Supplemental Nutrition Assistance Program), which we used to call food stamps, is minimal.

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According to the Center on Budget and Policy Priorities, the levels of SNAP over and underpayments are declining.

To put the statistics in context, an overpayment is defined as “they either went to ineligible households or went to eligible households but in excessive amounts, and more than 98 percent of SNAP benefits were issued to eligible households.” – Source

In 2011, for example, the overpayment error rate was 2.99 percent, and the underpayment rate was 0.81 percent. The combined error rate was thus 3.80 percent. But the net loss to the federal government from errors was only 2.18 percent.

Relatively few SNAP errors represent dishonesty or fraud by recipi­ents. The overwhelming majority result from honest mistakes by recipients, eligibil­ity wor­kers, data entry clerks, or com­puter program­mers. In recent years, states have reported that almost 60 percent of the dollar value of overpay­ments and more than 90 percent of the dollar value of underpayments were their fault rather than recipients’ fault. Much of the overpayments resulted from innocent errors by households facing a program with complex rules.

Medicaid Fraud

According to recent numbers, more than 58 million people receive coverage through Medicaid. According to 2011 statistics, there were 10,685 fraud investigations and 824 convictions from 1,011 indictments. – Source

Even if we use the total number of investigations started, the reported level of Medicaid fraud comes out to 0.018 percent.

So What is Disturbing?

The disturbing part of all the claims of benefit and welfare fraud is that there appears to be little support to back up the urban tales.

Logically some amount of waste, fraud, or abuse must exist. But evidence of massive fraud can’t be found.

Some also believe that many welfare recipients cheat.

“The myth of the Cadillac-driving welfare queen” who defrauds the system lingers even though there’s no proof of it, said Erin O’Brien, a poverty expert at the University of Massachusetts, Boston.

Welfare fraud among Philadelphia’s 95,456 recipients is “minute,” according to Peter Berson, assistant chief of the government fraud unit in the Philadelphia District Attorney’s Office.

The 200 to 400 cases of welfare fraud in the city each year – down 50 percent since 2002 because of better enforcement and fewer recipients – are not nonworking women having babies to game the government but working women receiving welfare and working at other jobs without reporting the income, Berson said. –  Source

If more people reported known fraud, then maybe the number of investigated and pursued fraud cases would be higher than the facts show that it is.

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And I’m sure that the number of fraud cases might be higher with an increased budget applied for investigations and enforcement. But in the face of pressures to reduce government, I don’t see how that is likely to happen.

There is no evidence of widespread benefit fraud until proven otherwise. But benefit fraud stories do make for an interesting read.


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30 thoughts on “Welfare and Benefit Fraud Statistics Show a Disturbing Pattern”

    • The very first thing that caught my eye is the low number of fraud cases. I don’t know where you have done your research but whatever you received bogus figures. Each state has a financial figure of (avrg.) 1.3 million in fraud cases each year. Total US fraud cases total 1.5 billion per year and that number is soaring out of control this past year. Fla. made one bust for 13 million, I think there was 5 other cases of record welfare fraud. Take each state and scour their court records. You’ll find a lot more than what you wrote about but it still isn’t even close to what they reported. In Penn. last year alone lost over 2 1/2 million by Sept.! Our gov. lies. And they are covering up. Don’t believe me, do some real research. http://thegardenisland.com/news/welfare-fraud-adds-up-to-jail-time-for-cheaters/article_b6542bba-95ed-5fa0-9abd-6859d2c679ab.html

      • Please provide links to the state figures you mentioned from the state. Let’s get the facts from the source. The link you provided actually seems to confirm the point of the article. Your link states in 2001 only 170 cases were submitted in the year and 9 were convicted in the state. Again, the point is that in the grand scheme the amount of fraud is relatively low, not that there are not cases of fraud.

    • Bogus article…it’s more profitable to property management companies to ignore or not investigate the rampant welfare fraud…aka unauthorized occupants or the infamous live-in boyfriends, live-in baby sitters, etc.

  1. Exactly! I remember going to a doctor, recommended by a friend, after a minor car accident. He suggested I stay home from work for six months and collect benefits. All I had was a sore shoulder that healed in a couple of weeks. When I went to pay, the staff had difficulty figuring out how to handle someone actually paying. I went back to work the next day.

  2. Yeah, until you have been down at the public assistance office and lived in the ghetto you have no idea what you are talking about. I imagine the statics here are much like that of sexual assault- under reported. Having lived in an area that draws highly on public assistance I can tell you that people lying about living with their children’s father who just so happens to work under the table is becoming the rule and not the exception. There are whole convenience stores that will let you purchase anything with food stamps-like computers and other electronics. Fraud is rampant. They lie about their income. They get food stamps and WIC for food, section 8 for housing, PIP for their utility bills and their baby’s daddy brings home a wad of cash under the table that they are free to spend on whatever they want because all of their vital expenses are taken care of. Trust me getting a job for a lot of these people would diminish their standard of living. I agree that this is not all recipients, as I was one at a time, but it is a lot more than is being reported.

  3. Fraud and misuse may differ; however, they are both just as frustrating to the working middle class who receive no benefits and often struggle to maintain the the basic subsistence living that many on benefits programs do. I know of hundreds of people who intentionally have children that they cannot not support in order to increase their earned income credit each year. The numbers are similar on those who use funds and resources, intended to care for children, put food on the table, etc., to buy cigarettes, to regularly get their hair done, nails done, tan, etc. To top it off, many do so while failing to live up to financial obligations, such as back child support, student loans, past credit debt, etc.. The system needs reformed, it needs more checks and balances, to assure that the resources are appropriated as intended at the individual level.

  4. The welfare system is a joke. You can’t sit behind a desk, or in your living room at mom’s house in jammies and write about sheeple that you wouldn’t have the nerve to even speak to by yourself. You know it is a socialist voting machine. Welfare should be for children and the elderly. The in betweeners should probably go a little hungry and they would change some of the habits of drawing freebies paid for by the working class. Or maybe the national debt might slow down just a little bit. My fair share. There is a good one. President says he wants everyone to do their fair share. Really? I’m raising my kids and paying my debts on my own, that is doing my fair share. Nope, guess not, I’m taking care of countless kids with parents who I’m also taking care of because they now have rental assistance, fuel assistance, snap, wic, cars, phones, Medicaid, tanf, etc. etc. They also have tattoos, piercings, pitbulls, drugs, alcohol, tobacco, hunting licenses, designer clothes, 2nd and 3rd cell phones, 70 inch t.v.’s, laptops, firearms, etc. etc. What is the deadbeats fair share, voting? Breathing? Procreating? Crime? You tell me.
    Since when has a government estimate been accurate, on anything? The greatest system in the world being flushed right before our eyes. You don’t believe it’s the best going, go try the other ideas out in say China, Russia, Venezuela, hey how about Greece where they froze people’s money and then took 60% of it to put into the government coffers. Now that is doing your fair share.
    I realize a response is doubtful from anyone as most of these have been several months to years ago. Hopefully our brave blogger or writer will see it and respond with some more statistics that the loyal sheeple of America will read and accept. My friend, come on out one night, use to be mostly weekends but now it is 7 days a week, and we will ride a shift and you can see what a large portion of the “needy” are up to. The gov’t ads show smiling, well dressed middle agers holding their kids and hoping for employment so they can get off of assistance. In truth, entitlements are an addiction and it is becoming generational and the system knows this. There is nothing temporary about welfare. Family’s stay on it for life and the children know no different, just that mom and dad don’t work and they won’t either. Very few use the benefits for a short time and move on but I’m afraid if you think they outnumber the lifers, brother you are fooled.

    • TD–well said. Thank you Steve for doing some homework on this. Here are facts that we see where we live. My wife works her tail off in a low paying job. Others who have been hired (does it matter the nationality) are on food stamps and their children now are on food stamps. The wife came home today and has had enough. Another worker with 5 children just announced she is having her 6th with her boyfriend. All 5 kids now are at day care supplemented by the state, she gets welfare, and yes, drives a better car than my wife. 2. I was at our local grocery store when people in front of me were giving food stamps for food. Some change came down the coin deposit and they didnt get it. I took it out to give to them thinking every little bit would help. I was also prepared to pay for something if the stamps werent enough. That is just me. When I get out to the parking lot I cant find them. I go around the corner of a new Hummer and they are loading the kids and groceries into it. Now is this all food stamp recepients, NO, but this is what we have created. I am voting for someone who gets tough on this. Unwed mothers and fathers, and even married parents who have to know the $$ is not in a bottomless pit to keep having more kids and we pay for it. Someone has to have the nads to use them to fight this injustice. If you dont work you dont eat. If you cant find a job, you don a safety orange vest and work for your city/govt cleaning up the streets. Right on TD, nail on the head!! Good work Steve for even bringing up the subject. I got my earful tonight from someone right in the middle of it!! My wife is announced to her long time democratic parents she is leaving that party. However, her mother begged her not to give in to the republicans either!! LOL She will be a conservative. I will have watching this transition but what she has been around and seen for 17 years has pushed over into a new look on reality!

      • People don’t use food stamps anymore. They use an EBT card that you can’t tell from a debit card. What the hell business is it of yours anyway?

    • You are so full of it TD, I grew up as a welfare child, as an adult, never touched it in my life and I as a single mom raised two kids on my own, who went without a single need. It’s so funny how people like you say they know “hundreds’ of freeloaders, now how in the hell is that even possible? How the hell do you know if some of the things you say these so called “freeloaders” have, were not gifts? You seem to be like that nosy, little old gossip lady that peers out the window behind the curtain and spreads rumors because you have no life and nothing better to do. You make quite a lot of judgements about people you don’t even personally know, so, how many of these so called hundreds you say you know for a fact are abusing the system, how many have you reported? How many have turned out to be actual cases of fraud?Tell ya what, how about you just mind your own business and let God do the judging, free up your own perfect conscience,

    • Exactly! 100% the truth. Welfare Fraud is rampant and too profitable for property management companies, keep those apartments filled, welfare cheaters never rat on other welfare cheaters.

  5. Out of 60K alleged incidents, only 52K were investigated. Of that 52K, there were only 425 convictions. That is only .8%. There are 1.5 million cases. So out of 1.5 million cases receiving welfare, 425 were convicted of fraud. That is .002%. How is this a disturbing pattern?

    • The real question should be why were there only 425 convictions out of 52k investigations? That is fishy and complete bullshit, I might add.

      • Steve(Not Mr. Rhode) please reference your evidence and resources. If you are calling BS, then you really should provide the facts to back your statement up. Opinion pieces do not count as evidence. Please provide proven numbers from reliable sources(multiple reliable sources even better) as this article has.

        Until then your comment is asinine. Thank you

          • I think maybe there was confusion that I was trying to avoid. I said (NOT Mr. Rhode) because the other comments were done by a Steve as well. My comment was directed at that Steve….not at you Mr. Steve Rhode, who DID provide links to references and sources. I enjoyed your article Mr. Rhode.

        • There are other types of welfare fraud not included in your “facts”. If you don’t agree with my comments, then go do your own research to prove me wrong. I’m not here to convince you fools.

          Having illegitimate kids to obtain welfare is still fraud.

          • How does one have an “illegitimate kid”? Is it a child or not. If you are claiming people are using the children of others to claim benefits, give me the source on that. However, if you are claiming people have children and then file for benefits, would the children not be eligible under the current system? And if they would be because the parent is applying, under the current system, how can that be fraud?

          • I’m not suggesting it, I’m saying that it happens. I actually have someone who lives at the end of my street who admitted to it. It is fraud when you game the system. No matter how you game it, no?

          • Is it her biological child there can be no fraud since the child would be qualified for benefits under the parent.

            If you are saying the person had a kid to just get benefits, that’s not illegal, just stupid.

          • Thank you Mr. Rhode for your logic and reason. After all the child had no say in being born, even if the intent behind its birth was unethical and yes stupid, it is not illegal. The child should be eligible for benefits. I agree with you wholeheartedly Mr. Rhode.

          • When you post a comment that is implying that the article the comment is posted on is BS, then you are trying to convince us. You are trying to convince us that the article is not true or correct. In that case, you should provide your sources and facts. Once more stating an opinion without supplying facts to back it up makes your comment fatous. Now if your intention was to simply supply a vapid comment, then you succeeded.

          • There is a concept known as innocent until proven guilty and the amount of money provided by the government for poor families with children doesn’t even cover the cost of having a child.

  6. Thank you for your research. I have tried to find this information but got bogged down by having to research state by state. What I found was that there is a lot of vendor fraud that no one seems to complain about. Reducing that fraud is a real opportunity to improve the system.


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