Welfare fraud, sometimes referred to as "welfare abuse," occurs when an individual knowingly provides false information to obtain funds from welfare programs.
The Truth About Fraud Statistics
Numerical data about welfare abuse is difficult to find. Not only are exact statistics hard to calculate, but information included in these calculations may not fit the traditional definition of fraud. According to a recent article in The Atlantic, much of what is categorized as fraud is due to employee error. Hard data about welfare fraud, therefore, should be considered in light of all of its contents, including the report's definition of fraud.
National Statistics Regarding Welfare Fraud
The Federal Government's food stamp program is titled the Supplemental Nutrition Assistance Program (SNAP). The program is administered by the U.S. Department of Agriculture, but individual states are responsible for distributing benefits. Reports about abuse of SNAP show that rates are on the decline.
U.S. Government Accountability Office
In 2010, this office reported that the error rate for the U.S. Department of Agriculture's SNAP benefits distribution declined by 56% between 1999-2009. As of 2010, errors in payment processing were reported at approximately 4%. Overall, this decrease resulted in a decline to one cent per dollar from 3.8 cents per dollar being abused.
According to Feeding America, SNAP abuse rates declined to 3.8% in 2011. However, the organization reports that the majority of these errors resulted in underpayments of benefits, and not in overpayments or findings of abuse. Feeding America also states that, as of 2011, the national rate of food stamp trafficking declined to approximately 1.3 cents per dollar.
State- or City-Specific Statistics
The Temporary Assistance to Needy Families (TANF) program is another Federal Government-sponsored program administered by the Department of Health and Human Services that provides cash to needy families with dependent children and to pregnant women. Funds from this program are distributed to the states, which can then use the funds to establish assistance programs of their choice.
Depending on how the state legislature established management of the funds, the agency responsible for investigating TANF fraud claims, under whatever name they may be labeled by the state, may oversee an entire state, a county or a city. Several of these agencies have released information regarding recently conducted investigations.
Although all states and cities administer the program, not all provide statistics to the general public about the benefits' disbursement or abuse. States and cities that provide information about TANF abuse include:
In 2012, the Special Investigations unit of the New Hampshire Department of Health and Human Services conducted over 2,000 investigations based on allegations of welfare fraud. These investigations secured 63 convictions, removed 119 people from the food stamp program, and disqualified 48 individuals from the TANF program.
The Division of Public Assistance of the Department of Health and Social Services reports that, between July 2011 and June 2012, it conducted 552 investigations into applications for assistance, finding 227 instances of welfare fraud. This resulted in a total of over $1 million in savings.
Additionally, the Division investigated approximately 1,500 investigations into individuals receiving benefits, finding that 1,150 were ineligible to continue receiving benefits. This resulted in over $3 million in savings. Overall, the Division's investigations of all types resulted in saving the state more than $5 million.
The Wisconsin Office of the Inspector General of the Department of Health Services investigates welfare fraud claims in the state. In June of 2013, the office received a total of 259 complaints of fraud. The office reports that, for the year-to-date 2013, it has established that the state was making almost $4 million in overpayments.
According to federal and state sources, abuse of social services program is on the decline. This is mainly because investigations into allegations of such have resulted in removing individuals from program eligibility.