The SSA’s disability benefits program is often accused of being a hotbed for Social Security fraud. News outlets even try catching fraudsters in the act, using phrases like “extra cash” and “milking the system.” But are they right? Is the Social Security disability program overrun by con artists stealing your tax dollars?
The answer isn’t simple, and opinions on the subject vary depending on who you ask. Below, we’ll explore the most recent Social Security fraud numbers and what they mean for you.
What Is Social Security Fraud?
This question may seem obvious, but in the world of Social Security, “fraud” has many definitions. Some people don’t even realize they’re committing acts that may fall under the fraud or misuse categories. According to the Office of the Inspector General (OIG), these may all be considered as Social Security fraud:
- Making false statements on claims
- Concealing facts or events that affect a claimant’s eligibility
- Misusing benefits as a representative payee
- Buying or selling counterfeit or legitimate Social Security cards
- Social Security Number (SSN) misuse involving any terrorist groups or activity
- Crimes involving Social SSA employees
- Scams involving the impersonation of any SSA employee
- Bribing any SSA employee
- Fraud or misuse of a grant or contracting funds
- Standards of conduct violations by SSA employees
- Workers’ compensation fraud
As you can see, Social Security fraud impacts more than just program beneficiaries. Even Social Security Administration (SSA) employees aren’t safe from investigation when fraud accusations happen. When you apply for disability benefits, the SSA requires truthful answers about your condition and limitations. Failure to do so could result in a criminal investigation or termination of your benefits. Of course, the agency also trusts that SSA employees will follow the program’s code of conduct.
How is Social Security Fraud Recorded?
Every six months, the Office of Inspector General (OIG) releases a semiannual report to Congress. This report sheds light on the department’s fraud investigation and recovery efforts. The SSA releases both Spring (October-March) and Fall (April-September) editions — accounting for the prior fiscal year. If you’d like to check out the report yourself, you can find a summary on the OIG’s website. These reports can better explain how fraud affects different Social Security programs. In addition, these reports list all monetary recovery efforts. In addition, tracking these statistics maintains the integrity of the program by weeding out individuals that abuse Social Security funds. The OIG covers fraud investigations and recovery efforts for the following programs:
- Social Security disability insurance (SSDI) benefits
- Supplemental Security Income (SSI) benefits for lowest-income Americans who are blind, disabled or aged 65+
- Social Security number (SSN) misuse
- Old-age survivors insurance
- Threats/employee safety
- Employee-related theft
In the past year, the OIG received 44,299 allegations specifically about Social Security disability fraud.
Investigative Results Into Social Security Fraud for the Past Year
Now that you know what a fraud allegation is, let’s explore the OIG’s investigative results for fall 2019 and spring 2020. Below, we’ve mapped out exactly how many allegations were received. We’ll also list the total opened cases, how many the OIG closed, and any penalties levied against alleged fraudsters.
- Total allegations received: 874,690
- Allegations specifically about Social Security Disability Insurance (SSDI) fraud: 44,299
- Allegations specifically about Supplemental Security Income (SSI) fraud: 27,768
- Percentage of all fraud allegations specifically related to disability benefits: 8%
- Total cases opened: 4,565
- Disability-related cases opened: 3,490
- Total cases closed: 4,940
- Disability-related cases closed: 3,925
- Arrests: 274
- Indictments/informations: 773
- Criminal convictions: 455
- Civil Action/CMPs: 70
- Investigative monetary accomplishments (settlements, savings, restitution, fines, SSA benefit recoveries, judgments & estimated savings): Over $285 million
Most Social Security Fraud Reports In The Last Year Came From Telemarketing Scams
Most Social Security fraud allegations reported between April 1, 2019 and March 31, 2020 involved telemarketing scams. Americans reported 700,535 such calls to the SSA during that period. In fact, those calls make up 80% of all Social Security fraud reports within the previous year. You probably got several such calls, because I certainly did.
You know those annoying calls where someone says there’s a problem with your Social Security Number (SSN)? They might threaten to stop your benefits or arrest you for identity theft. In some cases, your caller ID displays what looks like the SSA’s 1-800 number. Those calls have one thing in common: They require some kind of payment for you to avoid a negative outcome. Criminals may ask you to purchase retail gift cards, prepaid debit cards, pay by wire transfer, cash or even Bitcoin. Since 2018, those criminals took more than $50 million from vulnerable Americans. This spring, the SSA and Department of Justice (DOJ) reached out to U.S. telecom companies to help address this problem.
According to an OIG report, it took SSA staffers an incredible amount of time just to process scam-call complaints last year. The agency counts it as “100 workyears,” which is equal to the time it would take for staffers to:
- Process 6,000 disability claims
- Process 43,000 retirement claims
- Issue 270,000 new Social Security Number cards
Dealing with the scam-related calls also cost the agency $8.4 million in 2019. But working with America’s telecommunication carriers to solve this problem paid off. In February 2020, telephone companies nationwide blocked 68,490 Social Security fraud calls. Since implementing technology that stops criminals from displaying SSA-related phone numbers, these calls dropped dramatically. The agency’s efforts successfully blocked 99.2% of attempted Social Security fraud calls since 12/08/2019.
Nearly 1 in 3 Fraud Cases Results in Prosecution
In the last year, there were approximately 874,690 allegations of Social Security fraud. However, the OIG only opened 4,565 cases for investigation. Other than complaints about scam-related calls, just 2.6% of allegations warranted further investigation by the OIG.
Of 4,940 total closed cases, 1,572 (or 32%) resulted in some form of prosecution. While these numbers don’t represent most closed cases, the OIG clearly takes Social Security fraud allegations very seriously.
Our Take on Social Security Fraud
So, is Social Security fraud really as bad as it seems? The numbers say otherwise. Let’s put it this way: In April 2020, about 64.6 million people collected some Social Security benefits. Yet the OIG received just 174,155 Social Security fraud allegations about those programs in the past year. For perspective, that means just .3% sparked any notion of suspicious activity. This small number speaks volumes about the program’s overall integrity. There will always be some tiny amount of fraud, waste and abuse in any government program. The lesson here is that it doesn’t represent anything close to most people who apply for or receive Social Security benefits today.
If you suspect fraud, report it right away! The OIG and SSA encourage citizens to speak up and offer ways to report potential fraud anonymously. Visit the SSA’s website to report suspected fraud, misuse or abuse cases. The OIG will investigate any allegations that appear legitimate and publish their results in an upcoming semiannual report.
You May Qualify for Legal Assistance
Having a Social Security attorney file your claim makes you 2x more likely to get approved for benefits right away. Right now, it’s impossible to apply for disability in person because all Social Security offices remain closed. However, a lawyer can help you start the application process with one simple, free phone call. You pay nothing for legal assistance with your claim until after you win a cash settlement. And if you do win, then you’ll only pay a small, one-time fee.
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