Welfare Fraud

As the down slide of the United States economy hit during 2008 the demand on general welfare benefits significantly increased. Along with the higher welfare rolls comes increased incidents of welfare fraud. When it comes to public welfare programs, fraud comes in multiple forms, including making your household look bigger than it really is (the bigger the household the more income you are allowed to have and still receive welfare benefits), claiming more dependents than you really have (to receive additional funds beyond what you would otherwise be entitled to), hiding income you earn (to qualify for income when you would not otherwise be eligible) and providing false information in some other manner in an effort to qualify.

How Big of a Problem Is Welfare Fraud?

There are too many stories to totally document all instances of welfare fraud throughout the United States. Some of the more egregious examples have been well documented in the media. For example, Dorothy Woods, a Pasadena, California resident, claimed to have 38 dependent children. This allowed her to collect an amazing amount of benefits during the late 1970s and early 1980s. In another California case, Esther Johnson claimed more than 60 children and received more than $200,000 in welfare benefits in the 1970s as well. A California court later found her guilty of welfare fraud and sentenced her to four years in prison. In Chicago, a public legal aid director used 14 different false aliases to receive multiple instances of cash assistance and food stamps that totaled to more than $150,000.

Stopping Welfare Fraud

States have implemented several different systems to combat the growing epidemic of fraud when it comes to the public welfare programs they offer. First, almost all states, and their respective department of welfare offices, have began offering Electronic Benefit Transfer (“EBT”) cards for cash and food assistance payments. EBT cards act like debit cards and can be tracked electronically in real time to determine if the user is making purchases according to the rules of the particular welfare program the person is enrolled in. The card has technology built into it that prevents you from making purchases of certain items, such as alcohol, prescriptions and tobacco and can be shut down by the state at any time if they believe any type of welfare fraud is taking place by the user.

Regular welfare audits are also being conducted by state officials to catch individuals who have lied on their applications or are using the funds made available to them for improper purposes. These audits include physically going to recipient’s homes to verify the size and makeup of their household, reviewing tax returns and other documents to determine whether the income the application placed on his or her application is correct and reviewing spending habits of individuals with their EBT cards.

Unfortunately, as long as welfare programs exist, instances of welfare abuse will probably exist also.  However, today’s technology helps more than ever to catch criminals engaged in welfare fraud more than ever before, which protects the general welfare system and helps ensure that those who really need assistance receive it.

Source: cdss.ca.gov/fraud/PG270.htm

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