Spritzophrenia

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Would You Report Someone For Welfare Fraud?

Posted by spritzophrenia on September 8, 2011

Lots of people are interested in my post a while back about welfare fraud in the USA. So I thought I’d do a follow up. First, I’ve got some current figures from reliable sources. Here’s part of a 2011 paper. If figures bore you, skip to the interesting stuff below:

Overseas findings
The UK Department for Work and Pensions estimated that in 2008-09, approximately 2.2 percent of all benefit expenditures, or 3b [pounds sterling], was overpaid as a result of fraud and error (DWP 2009). Half of this, about 1.1b [pounds sterling], was attributed to fraud, although this was based on a sampling procedure rather than convictions. The figure represented an increase, from a low of 0.6b [pounds sterling] in 2005-06, despite concerted efforts by the department to stop fraud (NAO 2008).

In the United States in 2008-09, the Social Security Administration Office of the Inspector General (2009) received 129,495 allegations of fraud and closed 8,065 cases, with 1,486 criminal prosecutions. These activities involved over US$2.9b in ‘questioned costs’; with US$23.3m in recoveries, US$2.8m in fines and a further US$25.5m in settlements, judgement and restitution orders.

welfare

Australian data
The following section presents data supplied by Centrelink on its compliance and fraud-related activities and outcomes. Unlike the UK Department for Work and Pensions, Centrelink does not provide estimates of fraud but reports on detected errors and fraud prosecution actions and outcomes.
Formal fraud investigations are usually initiated through compliance and eligibility reviews. Reviews occur in large numbers each year. There is a crossover of triggers and methods, including routine data-matching, random sampling, identity checks and public tip offs.

Table 1 reports on the outcomes of reviews for the three year period 2006-07 to 2008-09. Of note is the fact that typically, only 15.7 percent of reviews led to cancellations or reductions in payments. Of these, as few as 0.8 percent were referred to the Commonwealth Director of Public Prosecutions (CDPP); with 0.5 percent being prosecuted. Prosecutions resulted in a 98.8 percent conviction rate. Overall, in the three years, 0.04 percent of customers were convicted of fraud. For the same period, fraud investigations were estimated to have produced $380.6m in gross savings and amounts targeted for recovery. This compares with $1.4b in overpayments identified and debts generated from the review process. Fraud therefore accounted for approximately 26.2 percent of invalid payments. Furthermore, on average, only 15.1 percent of investigations resulted in a prosecution referral. In 2008-09, Centrelink referrals accounted for 69 percent of defendants prosecuted by the CDPP (2009: 115-116).

Table 2 provides a snapshot of fraud across the top 15 benefit types. Within this group, the Single Parenting Payment and Newstart Allowance (unemployment benefit) together accounted for 72 percent of convictions and $33.5m of debt. The Disability Support Pension and Partnered Parenting Payment together accounted for a further 14.7 percent and $7.6m of debt.
Figure 1 shows longer term trends for compliance reviews and adjustments for the 12 year period from 1997-2008 (when Centrelink was established) to 2008-09.
They show that, in terms of the number of Centrelink customers, compliance reviews increased by 54.5 percent from an average of 41.1 percent of customers up to 2001-02, to an average 63.4 percent subsequently, while cancellations or adjustments more than doubled from 4.3 percent to 10.1 percent.
Figure 2 shows that referrals to the CDPP have increased less dramatically, with prosecutions and convictions at a fairly stable rate.

Exerpt from Prenzler, Tim. “Welfare fraud in Australia: Dimensions and issues.” Trends & Issues in Crime and Criminal Justice (2011)

Be careful in how you read the figures above, as it isn’t always clear what they mean. Also, these figures don’t tell the whole story. I haven’t fully absorbed the paper, but in essence, it supports my previous claim that less than 2% of people on welfare commit fraud.

In my last post, a few people queried the definition of fraud in the comments. So here’s the definition I’m using: Fraud is knowingly accepting welfare payments that you are not legally eligible for.

Note that it’s knowingly. Mistakes by the recipient, or the welfare agency are not fraud.

“Abuse of the system” is not fraud. If Bob is lazy and doesn’t want to work, but the welfare system has evaluated him fairly and allocated him funds, this is not fraud. You may wish to reform the system so that people like Bob can’t get money, but it’s not fraud. In New Zealand, where I live, it is not at all easy to get welfare, and it is not at all easy to live on welfare. It’s not a “cushy life”. Another paper I read suggests we feel more strongly about welfare fraud than we do about tax fraud or white collar fraud, arguably more serious crimes. I wonder why this is?

A few commenters assert that fraud is much more widespread than my figures show. Again, I reply: Show me the evidence.

Some commenters give anecdotal evidence, eg, “My sister has a baby and she hasn’t told them who the father is so she can get welfare, even though they are living together.” My question is, if you are so concerned about welfare fraud, why don’t you report them to the authorities? I know someone who has probably been collecting more welfare than she is entitled to for many years. Yet, if I report her, her son might suffer financially. Maybe we get the welfare system we deserve?

Would you report someone close to you for welfare fraud? If not, why not?

Respond

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26 Responses to “Would You Report Someone For Welfare Fraud?”

  1. […] Would You Report Someone For Welfare Fraud? […]

  2. I have reported welfare fraud! And I will continue to do so whenever I can. I do consider it fraud to collect welfare because you don’t want to work. Welfare was never intended to be collected because you COULD qualify for it but only when you had NO other options. It’s not a cushy life? Neither is working..especially for minimum wage. I am not talking about people who truly need the safety net for a period of time either.

    The system makes me sick. Why would anyone feel entitled to not have to pull their own weight and take my hard earned money from me.

    • Thanks Cristine. On the working life (especially at minimum wage) not being cushy, have you read “Nickel and Dimed”? I mention it briefly here. https://spritzophrenia.wordpress.com/2010/12/31/those-darn-religious-folk/

      It’s a really interesting experiment where Barbara tries to make a living on low wage jobs and finds it’s really hard.

      • Yes, my Uncle gave me that book a few years ago. That is very typical of low paying jobs. Unfortunately the wage gap in the US of A is growing. The top small percentage are making more than ever and the rest of us are making less. The middle class is no longer what it used to be

    • A welfare fraud investigator said

      Please realize that it is not welfare fraud just because you think it is immoral that someone has chosen not to work. Sifting through complaints like that actually chew up an enormous amount of time that could have been spent on other cases that have the potential for positive action.

      (Positive action is welfare fraud lingo for taking someone’s benefits away).

  3. chrissy said

    I have reported a case of food stamp fraud. The woman lived in a 130K house collecting food stamps of 700.00 and her bf made $25.00 pr hr.
    She didnt put him down as living with her. She doesn’t work. She has 3 kids and gets Child Support. The kids are all in school. She went on bragging to me about how she doesnt have to work.

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  5. Katie said

    I am currently someone that is receiving welfare assistance. I have not always received assistance since she was born but I have applied and received help a couple of times. I think it’s a shame that we don’t have physical evidence to support all of the evidence I have seen fraud with my own eyes and heard with my own ears. I wish I could invite you to sit in the waiting area of the welfare office I go to….just listen to people talk and you will witness fraud. I never stood up and said “Excuse me, this guy is blantenly discussing benefit abuse!” But it’s pretty pathetic that it happens right under the noses of these entitlement programs and they don’t even blink an eye to it! I mean there was me a single mother struggling to make ends meet, working two jobs to hit 32-36 hours of work, making minimum wage and that wasn’t enough to support myself on my own. I desperately needed some assistance nothing more then I was eligible for just a little help. I wasn’t receiving child support even though it was court ordered so times were tough for me. Then there was the guy next to me who was clearly on something. He sounded very intoxicated and was discussing with his friend who accompanied him how he couldn’t wait to get his cash benefits so he could by some booze and how he had someone lined up for trading the food stamps for drugs. I was shocked and disgusted that he was someone was basically boasting about how he beats the system and gets a handout when clearly this person doesn’t need it. Then there was a girl sitting a few seats away from me. She was a heroin addict I overheard her and someone who was working with her to apply for the benefits argueing about her state. She was very nonchalant and seemed incoherent. She kept nodding off and mumbling during her conversation. When the case worker called her in for her interview she stood up and dropped her entire folder full of verifications and such on the floor. I helped her pick them up and thought to myself this girl needs rehab not cash benefits or foodstamps. There are so many people that honestly need help and there are obviously some that don’t. Why should there be help for people who can’t even help themselves. This should be a temporary benefit and received when absolutely necessary. It should be a stepping stone in addition to working to better your finances, careers ect. As of right now I am working part-time as a hairstylist, going to school full-time and am on the Dean’s List with High Honors. I am finally receiving child support and that means less state assistance. I am getting by and working towards a better life and even paying my share of taxes so we aren’t all leaching off the system like so many think. I feel there are still many reforms to be made and there needs to be a more strict investigation process to catch fraud.

    • Allison said

      Yes, it’s true, some of these people probably need rehab. But last time I checked, rehab wasn’t free. Pretty much all states have done away with their public mental health institutions – and so people PAY for rehab. For an addict, I’m wondering where you think they will find the money to pay for the treatment they so desperately need? It’s one thing to point out that people need treatment – it’s another altogether to say that it’s as easy as just stop using drugs and spend your money responsibly. To say something like that indicates that you have no concept of the disease of addiction – might I recommend some education and compassion? Furthermore, a drug addict receiving benefits is no different than an obese person receiving benefits – and then using those benefits to feed THEIR disease. I don’t see you complaining about that. Disease status in no way disqualifies you for public assistance. In fact, in my opinion as a public health professional, it should qualify you for more so that you can get the help you so desperately need. “Help” isn’t just for people that can help themselves…by definition, those people wouldn’t need government assistance at all because they can help THEMSELVES. Who are you to be the final arbiter of who is worthy and who is not worthy of help? I think you should just get another job so that you are working more. Frankly, you’re taking my tax dollars when you seem able bodied enough to work harder…

      And finally, if you are still qualifying for state assistance, I can GUARANTEE you that you are NOT paying taxes – at least not Federal payroll taxes. Withholding from your income checks is NOT paying taxes if you get it all back (and then some) at the end of the year. Most people who qualify for benefits end up getting MORE back than their actual withholding due to the way our tax system is set up.

      Again, I echo the sentiment of the author – if all you have is some anecdotal evidence in which you have NO idea the circumstances that you are talking about – and have no intimate knowledge of the people in these anecdotes other than some (rude) eavesdropping, then you need to put up some actual evidence. I have yet to see any here.

      • Ruggster said

        That was a pretty thoughtful comment. It made me think….. Until the statement about getting another job…. That was just plain stupid.
        You are correct about people that have illnesses, however, I don’t think you’ll find lazy in your DSM that precludes someone from working. Anyway, if it were just illnesses, most people would have no problem offering assistance however, it has come to a point where people are stretching what a illness really is and exaggerate their predicament. I have seen it….. With my own eyes. Time and again. Knowing one person is getting something they don’t deserve is enough for me to suggest they need to be diligent in looking for more fraud. I have seen entire families suck off the system. Mom and dad start, their kids get to the age where they’re ‘on their own’ and they begin the draw and so on and so forth. If you haven’t seen that, you need to get out of your little bubble and look around.
        Not everything falls into our DSM-5 category of an illness. Some of it is simply lying, cheating and lazy.

  6. social security retirement benefits…

    […]Would You Report Someone For Welfare Fraud? « Spritzophrenia[…]…

  7. Michelle said

    I have reported someone for welfare and prescription fraud (obtaining narcotic prescriptions in her child’s name) and so far nothing has happened to her. She was collecting welfare for three children that all lived with their father’s. It’s funny because the father had to jump through hoops to prove that they were living with him so that they wouldn’t follow through with child support claims (automatically begun because of the welfare), however, what proof did they obtain from her that she was eligible for welfare in the first place. None. She, of course, had the children’s SS# and DOB which is apparently good enough for the state of Washington. Ridiculous!

  8. Emilie Hoyt said

    I would definitely report welfare fraud. While trying to create my own life for myself, I’ve made a series of bad life direction choices, forcing me to require state assistance. Knowledge through experience; welfare is one of the hardest things to actually qualify for nowadays, resulting from welfare fraud. You are required to go through many different work programs, that many people are too poor to be able to afford the transportation to, and if you miss one of those work meetings, you no longer qualify for state help, period. Also, the average amount a single person household recieves a month is $200. Imagine living off $50 a week. Its impossible in this economy, but this is the “help” our country offers its poor. Yet, we wonder why no one can get off welfare and make it on their own. How do they expect people to wean themselves off from it when all of their income is going to food and a place to live. Men and women who abuse the system disgust me. There are people out there starving on welfare, and having to choose between education or a job, because they can’t afford to survive off from what the state is forced to limit people to. People need to stop being so lazy, get out there and actually look for a job, and support their family the way most hard working americans do, on their own. Welfare is supposed to be a last resort.

  9. Kris said

    From my experience with safety net programs, The “benefits” are so small nowadays that cheating becomes a self fulfilling prophecy. When I was on unemplyment I received about 120 dollars a week, which is nothing. So of course I didn’t report that had a little income from the Reserves (I had left active duty military about year before) because I would receive even less money. As another example, my twin brother is an epileptic on Access (AZ’s Medicaid). When he found a job as a temporary employee without benefits, he concealed this from the Access Office. somehow they found out and he was told he would be kicked off of the program the following month. As we all know, insurance companies usually don’t cover people with pre-existing, and when they do, the person pays through the nose for coverage. Anyway, long story short, he was laid off a couple weeks later so by sheer luck, he didn’t lose his Access coverage. But my point is, the system is so bureaucratized the even people who really need the help are forced to cheat, as was the case for me and my brother.

  10. Ruggster said

    You don’t need evidence because no matter what anyone ever tells you, you will not believe them anyway. Liberals need the public to be dependant upon them. I believe it is some sort of character flaw that they can’t admit to and therefore, can’t overcome. You say that the numbers only show 2% of welfare fraud being so low that it isn’t even worthy of reporting. You fail to mention that the 2% that is reported is reported by the same agency that depends on the money to maintain their own jobs. Do you think that they would report that they are doing horribly?? There are many reasons for misreporting as well. Intimidation bythe recipients of benefits has been noted. Could you imagine a young lady fraud investigator denying or overturning benefits of a someone that is physically larger than they are. It may not be the situation for all but it is for some. You fail to mention that there are many reports of misuse and misreporting within the agencies that go unanswered because the actual department that is assigned to handle these cases is overwhelmed with cases. You also fail to mention that when they get overwhelmed and request an increase in manpower to chase these cases and investigate them that they are urged to clear cases rather than follow through with them. Your own numbers indicate a clear problem. In the UK alone. 5.8 million on unemployment. 3000 investigators. That is 5800 cases for each fraud investigator. If they worked a 40 hour week they would only be able to devote 30 minutes on each case. So, the idea that these investigators are really investigating, is preposterous. They are likely encouraged to close cases rather than pursue them. 30 minutes is not near enough time to properly investigate anything like this. That is just unemployment alone. Don’t forget medicare and medicaid fraud, housing fraud and foodstamp fraud. If there is a benefit out there, you can bet there is someone out there that is defrauding it or looking for a way to. Keep in mind that the fraud is usually not something as simple as taking away a few zeros on your application. It could be as simple as an ill attempt at job searching, underreporting income, under reporting actual family members contributing to the household or adding family members that depend on the household. With the different hats I wear, I come across fraud all the time. You don’t even need to look far. I could cover more ground here but I think my point has been made. So, I challenge you to do your own independant research, rather than depend on the welfare programs research to defend your position.

    • Locke said

      While you have given a whole bunch of reasoning to try and dispose of the evidence presented to you, the burden of proof lies on you.
      If you think that people are committing fraud, present us with actual data, not how you feel the system works. This article(and its predecessor) were formed to show people who just use anecdotal evidence that the evidence doesn’t support their claims.
      Also, don’t think that this post merely proves your first statement. I am wholly willing to listen to you, and I am. But you aren’t giving evidence, any links, and actual proof.
      Please present me with links to the sources of your independent research, bar anecdotes.

      • smpat04 said

        In addition to what Locke said, I want to address a few of those points.
        1. Government programs like this are audited by outside firms for the exact reason you mentioned. SSA is audited by Grant Thornton, a link to the Auditor’s Report follows. (http://www.socialsecurity.gov/finance/2012/Auditor's%20Reports.pdf)

        2. Whether or not liberals need people dependant on them is completely irrelevent to the conversation of how much fraud takes place in the social security system.

        3. Intimidation of people deciding on benefits is absurd. I’d like to see one single substantiated case. In my area, our social security office has bullet proof glass between the grandma that sits behind the counter and everyone else. If the worker actually felt threatened I’m sure there are procedures in place to protect them (likely having to do with the 3 squad cars that seem to constantly be in the parking lot).

        4. Now, this is just conjecture when talking about the SSA, but with the IRS the only people who get their accounts audited are the ones who put up red flags. Where do the red flags come from? Well, in this case it would likely be between the IRS and SSA if they talk (and if not that’s a huge issue). That way the 3k fraud detector people can be more effective since tehy’re focusing only on the cases most likely to be fraudulent.

        As far as the rest of what you’ve said, I can’t see anything that immediately calls the statements into question. However, as Locke said, evidence has been submitted in support of the author’s case, now it’s your job to present evidence that either disagrees with the author or agrees with you.

        • A welfare fraud investigator said

          I’m not sure how an audit would show that an opened investigation failed to find fraud. When investigators don’t have time to dig into their cases and be creative, they hit the minimum steps required to show due diligence and exonerate the allegation. They did their job and no is going to question the quality.

          The good work gets done when we have a little free time to think outside the box.

          Investigators working on the application end might let a bully slide because the don’t want to bring a manger into the conversation for their own reasons. It is not common. Most of my co-workers are women, and they are hard as nails,

        • A welfare fraud investigator said

          Bullying by clients shouldn’t usually be an issue for an investigator, because a good investigator isn’t going to broadcast to a client which way they are leaning, unless they are pushing for a confession.

          There might be a little confusion here between investigators and case workers. Case workers are only really responsible for processing the case. They are trained to understand policy. A client might try to get out of requested documentation by getting hostile with a caseworker.

          An investigator’s job is to collect information, and an investigator shouldn’t get into an argument with a client because they shouldn’t be telling the client what the agency already knows in the first place.

          Here’s an example to clarify the difference: An investigator discovers that a client failed to report resources, and makes a recommendation that said client’s case be closed. A case worker set the recommendation aside, because the investigator’s training to not cover a specific policy that makes that resource exempt.

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    […]Would You Report Someone For Welfare Fraud? « Spritzophrenia[…]…

  12. Stephanie said

    Thank you so much for your articles about welfare. I know I’m necro-bumping a bit here, but this is so important to me. I was on welfare during my teenage years (or rather, my family was) and it allowed me to become the college student, grad-school bound I am today. If someone I knew were committing welfare fraud, I would report them if I determined that they were causing other people problems or milking the system out of spite. I’ve never met someone committing fraud, and I’ve worked in public services like food pantries for years, but if the places I worked at found someone doing it, they’d be merciful, but stern.

  13. […] who post these things are wrong–that there are very few people who cheat the system, that those who do cheat the system are often not doing anything other than cheating a different system that those of us with money get […]

  14. […] https://spritzophrenia.wordpress.com/2011/09/08/would-you-report-someone-for-welfare-fraud/ […]

  15. tiperia linda tiedemann said

    yes I would like to report a couple that’s also collecting the single parent pension when she doesn’t even have her baby with her,also leaving with her partner that’s also collecting the dole and work on the side 5 to 6 days a week cash in the hand what a joke…

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