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What Is Social Security Fraud?

A Social Security benefits application.
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  • Written By: Lainie Petersen
  • Edited By: O. Wallace
  • Last Modified Date: 13 November 2014
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In Social Security fraud, a person or persons receive Social Security benefits to which they are not entitled. As the United States Social Security Administration oversees several benefits programs, there are many different types of fraud that can be perpetuated against the system. Some of the most common types of Social Security fraud include feigning illness or injury in order to collect disability benefits, hiding income or assets in order to establish eligibility for benefits, or using someone else's Social Security number to obtain benefits. In some cases, caretakers and family members of those who legitimately receive Social Security benefits may illegally appropriate these funds for their own benefit. The Social Security Administration is very concerned about these activities and encourages the public to be proactive in reporting Social Security fraud.

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In the United States, the Social Security Administration is responsible for managing a number of cash benefit programs that assist the elderly, the disabled and their dependents. Perhaps the best-known Social Security program is Social Security retirement, which provides senior citizens with income after they retire from employment. Typical types of Social Security fraud perpetrated against the retirement program includes identity theft, in which someone applies for Social Security using the identity of another person who may have worked long enough to earn a high level of benefits. Another type of retirement fraud is perpetrated by individuals who apply for early Social Security benefits but continue to earn income that they do not report to the Social Security Administration. While Social Security recipients over full retirement age can work and earn as much as they wish with no penalty, those who apply for early benefits must report their income so that their current benefit payments can be reduced accordingly.

Social Security also manages disability programs. In some cases, individuals who apply for disability engage in social security fraud by exaggerating their disability or by failing to report income earned through work. While recipients of Social Security disability money can often work part time and still remain eligible for benefits, these benefits are intended for those who are unable to earn a sufficient income through work as a result of their disability. Failing to report additional income is considered fraud and can result in a suspension of benefits.

In some cases, an individual may be entitled to Social Security benefits but may be in the care of individuals who are willing to exploit him or her. In such cases, the caretakers may seize funds intended for the care of the recipient and use these funds for their own benefit. In such cases, both the Social Security Administration and local social welfare agencies should be informed of this activity so that the fraud victim may be provided with assistance and protected from exploitation.

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bluedolphin
Post 3

So if someone steals a social security number and uses it to apply for and to receive social security benefits, what are they charged with? Are they charged with perjury, identity theft, or something else?

ysmina
Post 2

@ZipLine-- I'm not sure how common social security fraud is, but I read an article on it in the news recently. A man stole his relative's social security checks and cashed them. He had been doing this every month for many years. His relative did not get any of the money.

Especially elderly are more likely to be victims of social security fraud. They may be in bad health or may not realize what is happening. Their social security number may be stolen or their benefits collected for them. That's why everyone needs to be careful and report those that may be engaging in fraud.

ZipLine
Post 1

How common is social security fraud?

I doubt that it's very common because there are procedures that one has to go through to qualify for a social security benefits.

I once applied for food stamp benefits. I had to provide proof of income, tax return copies, letter from my employer etc. for the application process. I was rejected because my annual income was $100 over the limit. So I know that the human resources department works very diligently and examines all of the details when someone applies for benefits. I doubt that social security fraud occurs frequently, and when it happens, I'm sure that the fraud is found fairly quickly.

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