Social Security Fraud Costs Billions Each Year

The Trump administration is being highly criticized as seeking to cut Social Security disability benefits, presumably on the basis there are people collecting disability payments fraudulently. There is controversy over the causes for an increase in disability recipients with many experts attributing it to demographics.

I don’t know enough about the issue to take a position either way. I do know the political left hypes the issue as may the political right. The claims made hinge on the assumption that closer scrutiny of those on disability will result in lost benefits.

This should be a lesson to us all that once any social program is in place, grows and more people become dependent, managing its costs becomes more emotional and political than fact driven; suddenly for many costs become of little consequence.

One thing is certain, there is a great deal of fraud within Social Security.

From Investopedia


• Social Security fraud costs American taxpayers billions of dollars each year.

• Fraudulent activities include collecting disability benefits when not disabled or collecting Social Security income owed to somebody else.

• Social Security fraud is a serious crime that comes with penalties and fines.

According to the most recent statistics available, between 2004 and 2017 the Social Security Administration (SSA) admits to improper payments totaling $1.3 trillion. Retirement, survivors, disability insurance, and Supplemental Security Income were all involved. The use of fake or stolen Social Security numbers to obtain fraudulent tax refunds from the IRS also costs taxpayers billions each year, the IRS reports.

Improper Payments

An improper payment is when Social Security remits funds in the wrong amount to the wrong person for the wrong reason. Social Security recognizes the following six types of improper payments:

• Insufficient documentation

• Inability to authenticate eligibility

• Administrative or process errors

• Medical-necessity errors

• Failure-to-verify-data errors

• Issues with program design or structure

However, when an improper payment is a result of fraud, it is listed under “other reasons.”

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