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What Is Welfare Fraud and How To Report

By on 2021-10-20 15:34:50, 0 Comments

Welfare Fraud Reporting

Are you a recipient of any government welfare program? Or do you know of people who are on welfare benefits? If your answer is yes to one or both questions, then you probably know something about welfare fraud. But do you know enough?

Whether you’re on welfare or not, it is your responsibility as a citizen to report welfare fraud when you come across it. Keep in mind that those who perpetuate welfare fraud and scams are essentially stealing from those who really need the money or are more deserving of the welfare benefit.


Welfare Fraud Definition

Before we go into more details on reporting welfare fraud as well as the penalties to go with it, let us first define welfare as well as welfare fraud.

There are several public assistance or public benefit programs offered to eligible citizens. In general, these programs provide money, benefits, or support in obtaining food (such as social service food stamps), clothing, and housing. Some programs help in childcare and healthcare. Some of the federal government benefits programs are the following.

  • Supplemental Nutrition Assistance Program (SNAP).
  • Temporary Assistance for Needy Families (TANF).
  • Low Income Home Energy Assistance Program (LIHEAP).
  • Children’s Health Insurance Program (CHIP).

In addition to the aforementioned federal programs, states may also offer their own public assistance programs. Illegal obtaining of the same is considered a law violation referred to as welfare fraud. In essence, therefore, welfare fraud pertains to the wrongful acquisition or use of benefits or public assistance offered through various government programs. Such benefits, after all, are meant to assist low-income, disabled, or elderly individuals in order for them to afford basic living expenses.


Welfare Fraud Examples

Consequences of Welfare Fraud

As mentioned, there are several public assistance or welfare programs. Unfortunately, people also find various ways to take advantage of such programs. Welfare fraud may be committed by the recipient themselves or by someone else altogether. Welfare fraud, therefore, takes many forms. Here are some examples.

  • Recipient Fraud

This type of fraud is, as the name implies, perpetuated by the recipients or beneficiaries themselves. This happens when an individual purposefully provides false or misleading information during public assistance applications and while part of the program. This includes omitting information to secure one’s eligibility for assistance.

Some examples of falsifying details are:

  • Underreporting income or assets or not reporting income or employment altogether.
  • Not reporting a prior criminal record.
  • Claiming to be a single parent while the other parent is actually residing in the same home.
  • Submitting false household numbers, such as the number of children.
  • Using false identification to claim aid.
  • Misreporting disability status.


  • Withholding Material Changes

Correct information must be provided not only during application but also while remaining part of the program. This means that any public assistance recipient must give notice to the program whenever any material changes in their financial and household circumstances that might have some impact on their eligibility levels. Hence, intentionally withholding changes, for instance, employment or increase in income is considered welfare fraud.

  • Misuse of Benefits

Public assistance or welfare, like programs of its nature, is subject to restrictions put in place by the government. This is to ensure that the funds allocated for such programs are properly utilized. 

One type of benefit that is often misused is the electronic benefit transfer (EBT) cards which can be used by recipients like cash. Since EBT cards can’t be used in liquor stores, casinos, adult entertainment venues, and similar establishments, some recipients sell their cards (usually at 50 cents to a dollar). They will then use the money to buy, let’s say, liquor or lottery tickets. 

There are also cases of welfare fraud that are committed by actual criminals, mostly in the fashion of scams. Here are some such welfare fraud instances.

  • Recipients redeeming personal food stamps from their own retail stores
  • Overcharging Medicaid for services provided
  • Charging Medicaid for services that were not even provided in the first place.
  • Enrolling dead people on benefits or using their identities to charge, say Medicaid, for fraudulent services
  • Faking or stealing birth certificates and identification cards to claim, say, public housing benefits
  • Exploiting the broad-based categorical eligibility (BBCE) loophole in food stamps


Welfare Fraud Investigator and Other Means of Welfare Fraud Detection

Welfare fraud is truly a matter of concern. Despite measures and restrictions put in place by the government, small-scale welfare fraud still manages to slip under their radar. From time to time, big-scale welfare fraud, sometimes even worth millions of dollars, comes to light. 

In order to help put a stop to welfare fraud, many states have established various welfare fraud investigation units. Such investigation units are usually under their social services, children and families, or human services departments. These departments or units uncover and/or put a stop to welfare fraud by doing the following.

  • Thoroughly review public assistance applications.
  • Conduct audits.
  • Review information of recipients (such as doing computer system matches to identify any unreported information, e.g employment).
  • Take complaints of possible fraud (this could be in-person reports, anonymous tips, or calls through established lines such as a disability fraud hotline).
  • Investigate leads of any related fraudulent activity.
  • Conducting unannounced home visits.


How To Report Welfare Fraud

How To Report Welfare Fraud Anonymously

Are you wondering how to report welfare fraud anonymously? Or perhaps you want to know how to report disability fraud or food stamp fraud? Or maybe you know someone who is misusing what’s supposed to be for housing, healthcare, or child support? So how does welfare fraud reporting work? 

Well, along with the efforts of various concerned agencies to put a stop to welfare fraud, they have launched different ways for concerned citizens to report fraud. Reporting welfare fraud may, however, vary depending on the state in which you live or where the fraud is committed. Although some types of welfare fraud may be reported to concern federal agencies (for instance, you can report food stamp fraud to the USDA).

Here are some ways on how to report welfare fraud.

  • You can go to the nearest welfare office.
  • You can call the hotline of the concerned agency (for instance, reporting disability fraud can be through the disability fraud hotline of your respective state).
  • You can also choose to report to various non-government organizations (NGOs) that deal with welfare fraud.

While you can opt to make an official complaint or report about any welfare fraud you might encounter, you may also choose to report it anonymously. The method is up to you, but you might want to do so via NGOs that would help ensure your anonymity. Take note though that if you choose to report anonymously, you will most probably not be updated on how the case goes, or even if a welfare fraud case pushes through from your report.


Welfare Fraud Penalty

So, does someone commit welfare fraud to send someone to jail? What exactly is the penalty for not reporting income change to Medicaid? What about the punishment for lying on food stamp applications? Well, welfare fraud penalties vary depending on the state the fraud was committed in as well as on the severity or level of the fraud. 

In general, here are the penalties individual could face when committing welfare fraud.

  • Criminal Penalties as Welfare Fraud Penalty

The federal government as well as all states treat welfare fraud as a crime. Some states treat welfare fraud as a separate offense while other states would simply charge a person with theft, perjury, or equal offense. Criminal penalties range from lighter misdemeanor offenses to serious felony charges.

The punishment for a misdemeanor or felony charge may also vary by state. In general, misdemeanor offenses will typically involve jail time of less than a year. A felony charge, on the other hand, carries a set punishment that might range from a year to life imprisonment. While some states simply charge similar or equivalent cases, other states charge, say perjury, on top of the initial misdemeanor or felony charge.

  • Restitution as Welfare Fraud Punishment

A person convicted of welfare fraud may also be ordered to repay the government for the value of the benefits obtained by fraud. This repayment is referred to as restitution. In some states, failure to make restitution payments could either land the offender back in jail or can result in a civil judgment that will then be sent to collections.

Take note though that the repayment of benefits does not change the fact that the original fraud was committed. Also, while repaying the benefits might help the charged individual to negotiate a plea bargain, it won’t necessarily stop the prosecutor from filing criminal charges. Moreover, restitution or repayment cannot be used as a defense against charges.

  • Suspension or Disqualification From Benefits as Welfare Fraud Penalty

Once a person is found guilty of welfare fraud, whether in federal court, state court, or in an administrative hearing, the said individual may be suspended or even disqualified from receiving benefits. The length of suspension will also depend on several factors or the set consequences of welfare fraud per state.


5 Ways to Protect Yourself from Identity Theft and Other Welfare Fraud

Although a lot of welfare fraud cases are committed by the beneficiaries or recipients themselves, the more large-scale fraud is actually committed by third parties. Such criminals can target the living. Protect yourself and your family from welfare fraud by observing these five things:

  1. Educate yourself and your family on various benefit scams. One such scam is people calling you to offer government benefits. They will usually gather information which they would then use to steal your identity. Kiwi Searches is a great source to use to discover the scammer behind the phone. 
  2. Make sure that your mailbox is secure. Some criminals might steal government letters or mail in general and use such to steal your identity.
  3. Always keep your Social Security number and other private information safe.
  4. Immediately report lost or stolen Electronic Benefits Transfer (EBT) cards.
  5. Notify the Social Security Administration when a family member dies. You can do so by providing the Social Security number of the deceased to the funeral home, who can then make the report for you.

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