Welfare fraud is the illegal use of state welfare systems by knowingly withholding or giving information to obtain more funds than would otherwise be allocated.
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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. In 2010, less than one-quarter of new welfare applications in San Diego County had some form of discrepancy, whether error or fraud. In response to the perception of state officials volume of fraud cases, the application process has gotten stricter. Some advocates have expressed concern that the stricter application process would make it more difficult for families in need to receive aid.
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.[1]
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
Fraud during Natural Disaster Relief
Federal aid funds intended for Hurricane Katrina victims to rebuild their homes was improperly received by some charities and government agencies. In the fraud incidents, individuals would file for relief with false information, or, due to the mishandling of the relief efforts, occasionally receive duplicate relief payments. The Hurricane Katrina Fraud Task Force was developed to investigate the fraud.
Welfare Fraud Cases
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.
In Japan
In 2010, a Tokyo family was suspected of fraud after claiming pensions for a man for 30 years after his alleged death. His 'skeletal remains' were found still in the family home.