Dissecting & Recognizing Welfare Fraud

Welfare programs contribute to creating a better country. It supports children and families in need to reduce poverty. If you qualify, this safety net program can supplement your finances to get back on your feet. 

Aside from generosity, welfare is known to be expensive in most states. Although it’s better than not helping at all, welfare doesn’t solve any problem; it only offers money to make the problem more bearable.

Many families agree that the system isn’t consistent nor effective. Welfare con men, for example, can steal most of these benefits by misrepresenting their background. You can find stories of individuals who stole over $100,000 within a year. 

As citizens, we expect welfare states to improve their programs and prevent fraud. The question is when, and how exactly? It doesn’t seem to happen anytime soon. Does that mean that we will continue to pay tax money to some random thieves? Is there anything we can do to stop welfare scams?

What Are Welfare Scams?

Welfare fraud represents the thousands of people who fake their information to receive unearned benefits.

  • They steal from taxpayers like you.
  • They deceive the government with false applications.
  • They steal benefits from other families who may need them more.

Most scammers will use forgery to create false identities. Others will steal the receivers’ identities to collect funds on their behalf.

Scammers aren’t always behind the fraud. Sometimes, it’s a citizen exaggerating the events or double-speaking with the intention to collect those benefits.

The easiest way to fake your application is unreported income. You simply hide your earnings from the Government or fake your tax returns. Multiple non-traditional jobs use payment methods that are non-taxable/invisible for these agencies: peer-to-peer, wire-transfers, money orders, cash, or cryptocurrencies.

Types Of Welfare Fraud

#1 Unearned Social Benefits

The Government mistakenly offers welfare benefits to people who trick the system. The most popular way? Unreported income. If you pay taxes, have familiar responsibilities, and there’s no income coming in, you deserve some help.

Welfare systems plan to help people protect from life uncertainty: A serious accident, the loss of a loved one, retirement, and so on.

A scammer can forge documents to misstate numbers and qualify for unearned benefits. This social crime also means people in need will be splitting their benefits with crooks.

#2 Identity Theft

A scammer finds a person who benefits from welfare, then uses multiple phishing tactics to supplant their identity. One day, the victim stops receiving the benefits; instead, they get other notices they can’t explain.

The con man lives off someone else’s benefits. The victim often becomes responsible for any debt the scammer has.

Now, welfare fraud stands for one of the countless applications of identity theft. If you lose your identity on a phishing attack, act fast. A thief can access any account you’ve created.

Here’s our Guide To Prevent Identity Theft

#3 Expired/Duplicated Titles

Welfare states consider such benefits to be rights, not bonuses. As rights, you can’t sell, supplant, take away, or duplicate the help received from welfare systems.

Yet, people fail to report these changes. The fact that you received welfare benefits in the past doesn’t mean you still qualify for them today. Otherwise, people would continue to hold them until the system serves so many citizens that it crashes.

  • If a familiar passes away, that doesn’t entitle us to receive benefits on his behalf.
  • Certain programs only apply when you have no other income sources or help. If you apply for such welfare programs, it’s unfair to keep in secret other income streams and benefit programs. Does it make sense, for example, that a disabled person receives work compensation?
  • You can’t receive someone else’s benefits regardless of their permission. If you’re in a relationship with that person, or they live in the same household, that can expand your benefits. You still can’t take the other’s benefits.
  • You can’t hide welfare benefits to qualify again and duplicate.

#4 Disability Fraud

Most who qualify for disability programs have physical restraints to prove it. But what about other invisible, psychological disabilities that we can’t detect?

That has created a confusing list of cases in the US. They look like normal people from the outside, but they receive money from some questionable limitations. If you met these individuals by coincidence, you’d never believe they’re disabled.

Unless you surveil them 24/7 with a camera, there’s no way to detect or report a liar. But we can still recognize for two situations:

  • The person who’s disabled from work receives work compensation (which is contradictory), meaning they’re working without reporting it. They’re deceiving the disability program.
  • A person has been receiving disability benefits for decades. If you come for a second inspection, chances are they’ve recovered. They’re taking advantage of an expired qualification.

Learn more: “The Real Story Behind Disability Fraud.”

Can You Stop Welfare Fraud?

Ideally, a person would report with enough proof to stop the welfare scam. But like invisible disabilities, these cons are hard to prove.

The Office of Inspector General will investigate social fraud, but they can’t go after every single case without evidence. If a person shows signs of welfare fraud, you can share your suspicions with the OIG, so they check if it’s worth moving further.

The claims they more likely investigate include unreported income and expired benefits.

Also, learn how fraudsters misstate information with accounting tactics

The Bottom Line

In most cases, welfare fraud remains undetectable unless the scammer reveals it himself. It helps to revise the welfare system periodically to make sure everyone is updated. If they find a person with the wrong (or expired benefits), or they can’t prove they qualify for them, welfare states can take them away.

Welfare mainly serves:

  • Those who have no income sources
  • Children who live with single parents
  • Pensioners

In any case, welfare fraud shows the loopholes that the law failed to prepare for. Long term, it is more effective to reform welfare plans to stop fraudsters from exploiting the system.

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