Welfare fraud refers to various intentional misuses of state welfare systems by withholding information or giving false or inaccurate information. This may be done in small, uncoordinated efforts, or in larger, organized criminal rings. Some common types of welfare fraud are failing to report a household member, claiming one or more imaginary dependents, failure to report income, or providing false information about the "inability" to work. There have been cases of people feigning illness in conjunction with welfare fraud.

Overview

In practice fraud tends to involve acquiring welfare benefits that are the recipient is not qualified for. Either the recipient is collecting benefits under their own name but does not actually qualify for the benefits, or they are collecting the benefit on behalf of someone who is not actually going to receive the funds.

Accurate statistics on welfare fraud are difficult to obtain. In every U.S. state, the penalty for extensive welfare fraud (fraud over a period of years) is prison. Some states offer large rewards for reporting those who are guilty of years of welfare fraud.

Welfare fraud is criticized by welfare advocates for making fewer funds available to those who were intended to receive them. Welfare fraud is criticized by opponents of welfare in general for creating situations where taxpayers subsidize instances of middle-class or even lavish living by criminals. The terms welfare queen

Welfare queen

A welfare queen is a pejorative phrase used in the United States to describe people who are accused of collecting excessive welfare payments through fraud or manipulation. Reporting on welfare fraud began during the early 1960s, appearing in general interest magazines such as Readers Digest...

 and welfare Cadillac are pejorative terms related to welfare fraud.

Welfare fraud has also been criticized for its role in modeling criminal behavior in children, many of whom may act out by taking drugs, becoming sexually abusive, crossing state lines to flee prosecution, engaging in welfare fraud themselves, or committing other crimes and frauds.

The punishment for welfare fraud varies by jurisdiction. In the United States, punishment for the first offense may be as mild as suspension of welfare privileges for a year, but can include fines and jail time.

Examples of welfare fraud

• The executive director of the Illinois Legislative Advisory Committee on Public Aid in 1977 claimed that Linda Taylor of Chicago used 14 aliases to obtain $150,000 for medical assistance, cash assistance and bonus cash food stamps. He claimed that she went from district to district with many disguises, using more than 100 aliases. She is believed to form the basis of Ronald Reagan's "welfare queen
  Welfare queen
  A welfare queen is a pejorative phrase used in the United States to describe people who are accused of collecting excessive welfare payments through fraud or manipulation. Reporting on welfare fraud began during the early 1960s, appearing in general interest magazines such as Readers Digest...
  
  ", and was sentenced two to six

• Dorothy Woods, who claimed 38 non-existent children. She was sentenced to eight years jail.

• Esther Johnson, who was sentenced to four years in state prison when accused of "collecting $240,000 for more than 60 fictitious children".

• Arlene Otis was indicted in Cook County, Illinois for "613 counts of illegally receiving $150,839 in welfare funds between July 1972 and February 1978." She was sentenced to four years jail.

• Un-named woman (60) of the Roma people illegally received in excess of $1,400,000 by deceiving the Norwegian welfare authorities for 23 years. Techniques used were claiming for 17 fictitious grandchildren, and claiming her son was autistic, nursing him through the age of 13 in meetings with welfare workers. Court case pending (Oct 2009).

• 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.

Prevalence of Welfare Fraud

The Los Angeles Times reported in 2010 that twenty-four percent of new welfare applications in San Diego County contain some form of fraud. However, this statistic was misreported and the actual figure is probably considerably lower. The US Department of Labor reported that 1.9% total UI payments for 2001 was attributable to fraud or abuse within the UI program.