Welfare fraud is the illegal use of state welfare systems by knowingly withholding information or giving to obtain more funds than is allowed.
In the United States
The US Department of Labor reported that 1.9% total unemployment insurance (UI) payments for 2001 was attributable to fraud or abuse within the UI program. The Los Angeles Times reported in 2010 that 24% 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.
In Florida, from July to October 2011, cash welfare recipients were drug-tested, with advanced notice, and only 2.6% came back positive. Thus, 97.4% of recipients who chose to partake in the testing program were not using any kind of illegal or illicit drugs. Of the 2.6% that came back positive, most of the people came back positive for marijuana. Governor Rick Scott eventually stopped pursuing people on welfare to get tested.
According to the Department of Labor, based on the 2012 IPIA three-year average data report, Unemployment Insurance (UI) fraud was seen in 2.67% of cases. XML and XLS Unemployment Insurance data sheets released yearly available at: www.dol.gov/dol/maps/Data.htm
Examples of US welfare fraud include:
- A 1977 claim by the executive director of the Illinois Legislative Advisory Committee on Public Aid, that a Chicago woman named Linda Taylor used 14 aliases to obtain $150,000 for medical assistance, cash assistance and bonus cash food stamps. She is believed to form the basis of Ronald Reagan's "welfare queen", and was sentenced for two to six years.
- Dorothy Woods, of the U.S., who claimed 38 non-existent children. She was sentenced to eight years' jail.
- Esther Johnson of California, sentenced to four years in state prison in 1979 for "collecting $240,000 for more than 60 fictitious children".
- Arlene Otis of Cook County Illinois, indicted on 613 charges of "illegally receiving $150,839 in welfare funds between July 1972 and February 1978." She was sentenced to four years' jail.
In the United Kingdom
The United Kingdom Department for Work and Pensions (DWP) defines benefit fraud as when someone obtains state benefit without being entitled to or deliberately failing to report a change in personal circumstances. The DWP claim that fraudulent benefit claims amounted to around £900 million in 2008-09.
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% on the year before. A poll conducted by the Trades Union Congress in 2012 found that perceptions among the British public were that benefit fraud was high. On average, people thought that 27% of the British welfare budget was claimed fraudulently;, but official UK government figures have stated that the proportion of fraud stands at 0.7% of the total welfare budget in 2011/12.
- "Committee on Ways and Means, Subcommittee on Human Resources, 6-11-02 Testimony". Waysandmeans.house.gov. Retrieved 2012-03-14.
- "Fact Check: The Frequency of Welfare Fraud - voiceofsandiego.org: San Diego Fact Check". voiceofsandiego.org. 2010-11-10. Retrieved 2012-03-14.
- "Unemployment Insurance (UI) Improper Payments By State". Retrieved 2013-09-12.
- Associated Press, Mar. 8, 1977, AM cycle, Chicago (available on LEXIS)[verification needed]
- Spamlaws.com Welfare fraud examples
- "Woman's Aid Claims for 38 children Are Examined". The New York Times. December 21, 1980. p. 31.
- Associated Press, June 13, 1979, AM cycle, Compton, CA (available on LEXIS)[verification needed]
- "Woman Faces 613 Counts Of Welfare Fraud". Observer-Reporter. Associated Press. May 9, 1978.
- Reporting benefit fraud at Directgov
- "State of the nation report: poverty, worklessness and welfare dependency in the UK" (PDF). HM Government. May 2010. p. 34. Retrieved 5 January 2013. Figures quoted as distinct from costs related to error
- Dixon, Hayley (13 December 2013). "Majority of benefit cheats not prosecuted, official figures show". The Telegraph. Retrieved 24 February 2014.
- "Support for benefit cuts dependent on ignorance, TUC-commissioned poll finds". TUC. Retrieved 5 January 2013.
- "Fraud and Error Preliminary 2011/12 Estimates". Fraud and Error in the Benefit System: Preliminary 2011/12 Estimates (Great Britain) Revised Edition. Department for Work and Pensions. 6 June 2012. p. 2.
- "Tokyo's 'oldest man' had been dead for 30 years". BBC News. 2010-07-29. Retrieved 15 January 2013.