Just How Wrong Is Conventional Wisdom About Government Fraud? Entitlement programs, from food stamps to Medicare, don't see unusually high cheating rates -- and the culprits are usually managers and executives, not "welfare queens." It’s not easy to get agreement on actual fraud levels in government programs. Unsurprisingly, liberals say they’re low, while conservatives insist they’re astronomically high. In truth, it varies from program to program. One government report says fraud accounts for less than 2 percent of unemployment insurance payments. It’s seemingly impossible to find statistics on “welfare” (i.e., TANF) fraud, but the best guess is that it’s about the same. A bevy of inspector general reports found “improper payment” levels of 20 to 40 percent in state TANF programs -- but when you look at the reports, the payments appear all to be due to bureaucratic incompetence (categorized by the inspector general as either “eligibility and payment calculation errors” or “documentation errors”), rather than intentional fraud by beneficiaries. A similar story emerges with everyone’s favorite punching bag, food stamps (or, as they’re known today, SNAP). Earlier this year, Senator John Thune of South Dakota and Rep. Marlin Stutzman of Indiana, both Republicans, introduced legislation to save $30 billion over 10 years from SNAP, purportedly by “eliminating loopholes, waste, fraud, and abuse.” Once you dig into their fact sheet, however, none of the savings actually come from fraud, but rather from cutting funding and tightening benefits. That’s probably because fraud levels in SNAP appear to be as low as with the other “pure welfare” programs we just touched on: “Payment error” rates -- money sent in incorrect amounts and/or to the wrong people -- have declined from near 10 percent a decade ago to 3 to 4 percent today, most of it due, again, to government error, not active fraud. The majority of food-stamp fraud appears to be generated by supermarkets “trafficking” in the food stamps. Beneficiaries intentionally ripping off the taxpayers account for perhaps 1 percent of payments.
Welfare Myth Fraud is always a problem. Lying and cheating is wrong and society should certainly discourage it. But benefit fraud - people lying and cheating in order to increase the size of their benefits - is not a big problem. There are many problems which are much bigger, in particular fraud by government. First of all it is worth examining the facts. Sometimes government reports fraud and error together as costing £5.2billion. But it is a major confusion to treat errors by claimants and administrators as fraud. The real level of benefit fraud is estimated by government as £1billion. In terms of the gross cost of benefits this represents 0.56% of the total cost of benefits and pensions. This is a very low figure for any complex financial system. It is also very interesting to compare this figure with figures that seem to get much less attention from our political leaders: The National Fraud Authority estimated that in 2012 tax fraud (including Council tax and tax credits) was £14.5billion. This is not tax evasion (which is a much bigger figure) this is straightforward lying and cheating in order to reduce the tax you pay. HuffPost is now a part of Verizon Media
Debunking myths about food stamps Myth 1: SNAP recipients are “welfare queens.” Reality 1: SNAP primarily provides assistance to the working poor. According to research by the Center on Budget and Policy Priorities, four out of five SNAP beneficiaries are either working—many of which are in the military— or individuals who cannot be expected to work, such as children, the elderly or the disabled. Myth 2: SNAP is rife with fraud and abuse. Reality 2: SNAP is a well-run and efficient federal program. Since the introduction of the Electric Benefit Transfer card (EBT), which is essentially a debit card to purchase food, fraud within the program has reached unprecedented lows. According to the Government Accountability Office (GAO), “trafficking,” which involves selling SNAP benefits for cash, has gone from 3.8 cents per dollar to one cent per dollar over the last twenty years. Furthermore, SNAP is an efficient federal program. Approximately 92 percent of federal SNAP funding goes towards the beneficiaries. Only eight percent is spent on administrative costs, such as salaries, training and nutrition education.
Busting the Myth of ‘Welfare Makes People Lazy’ Cash assistance isn’t just a moral imperative that raises living standards. It’s also a critical investment in the health and future careers of low-income kids. Many economists have for decades argued that this orthodoxy [that welfare makes people lazy] is simply wrong—that wisely designed anti-poverty programs, like the Earned Income Tax Credit, actually increase labor participation. And now, across the world, a fleet of studies are converging on the consensus that even radical welfare programs—including basic-income programs and what are called conditional cash transfers—don’t make people any less productive.
10% fraud is pretty high imho so there goes your first rebuke... there are signs all over south florida proclaiming $$$ per child on your taxes these are placed in lower income areas by tax preparers therefore incentivizing MORE children to lower incomes pretty self explanatory yes he chose to work rather then sit home on the dole..... 'bil' acronym for brother in law
When I googled this quote I was taken to 44 Important Welfare Statistics for 2020 - Lexington Law the other Welfare Fraud While the Lexinton page doesn’t really explain things the Federal Safety Net does explain as do the other articles cited that the majority of the figure isn’t fraud by participants but administration errors. Improper payments are described this way by the OMB: Improper payments occur when: funds go to the wrong recipient, the recipient receives the incorrect amount of funds (either an underpayment or over payment), documentation is not available during review to discern that a payment was proper, the recipient uses funds in an improper manner. Although not all improper payments are fraud, and not all improper payments represent a loss to the government, all improper payments degrade the integrity of government programs and compromise citizens’ trust in government.
The stat still stands 10+ % even if less is legit fraud its still magnitudes higher than POINT EIGHT percent you quoted and do you really think the fed is going to admit truth? now? under Trump? you dont trust the government to do the right thing in some circumstances but trust them to admit they are screwing shit up? the job he holds is not relevant point is he chooses to work rather then sit home on the dole
Likewise, a survey of the general population has found that more than 80% are prepared to cheat on welfare if the risk of audit is only 1/6. In most cases, welfare fraud involves modest sums and is committed by people who struggle with poverty, but once started it often continues after reaching financial stability. and your statement is from the atlantic a notoriously left leaning publication
wrat Your view is that poor people are poor because they make bad decision that make them poorer but here someone is choosing to lose money, when they didn’t have to, and you are saying that the choice to be poorer a good decision? It would be interesting to know the job which might give a bit of understanding but for some reason you are refusing to tell us that. I’m not a mind reader I don’t know what your argument is? It’s confused you seem to be saying yes you understand that not all improper payments are fraud but you still want to think of them as fraud and then you go off on not trusting the government or some such. And I really not sure what the tax preparers thing is all about. And what your arguement for bringing them up is unclear. Is it possible for you to explain your thinking?
you quoted a POINT EIGHT percent of fraud ... I found here its more likely around 10% you came back with not the entire 10% is fraud I agreed and said even if its half of the 10% as fraud its still MUCH greater than your POINT EIGHT.. and you dont trust Trump yet you are willing to use the Gov't stats/propaganda to promote your point There are plenty of reasons why people are poor, poor choices perpetuate it Its some sort of labor related some such ..blue collar work Tax prepare statement is regarding a cycle of dependency and entitlement by incentiving lower income residents to have more children thus making it harder to work thus fostering dependency thus fostering entitlement Which is actually created by the Gov't and being exploited
Wrat Many blue collar jobs are paid at a much higher rate than working in a coffee shop as a waiter so it makes me wonder even more what your brother in laws job is and how he survives on it.
Wrat The 0.8% was for the UK not the US? The articles I cited about America seem to indicate that recipient fraud rather than clerical error is around 2% it varies from program to program. One government report says fraud accounts for less than 2 percent of unemployment insurance payments. It’s seemingly impossible to find statistics on “welfare” (i.e., TANF) fraud, but the best guess is that it’s about the same. A bevy of inspector general reports found “improper payment” levels of 20 to 40 percent in state TANF programs -- but when you look at the reports, the payments appear all to be due to bureaucratic incompetence (categorized by the inspector general as either “eligibility and payment calculation errors” or “documentation errors”), rather than intentional fraud by beneficiaries. So you seem to accept it is lower than 10% so say 5% this other calculation puts it at 2% so that means 95-98% of such benefits are legitimate. Fraud, overpayments and underpayments in all assistance programs cost federal and state governments about $136.7 billion (in 2015), while according to the Internal Revenue Service, tax evasion cost the federal government on average $458 billion per year between 2008 through 2010. I can see that the system needs improving both in managing welfare payments and in the collection of taxes.
wrat LOL why are you conflating Trump with ‘government’? One of the most important jobs of government is the collection of information so that it can be given to politicians so they can make appropriate policy decisions. The problem is when ideologue takes over from rationally based decision making. We have seen this in climate change, health and welfare