Everything You Need to Know to Report Disability Fraud

Posted by Scott Flexer on Feb 18 2020

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Social Security Disability programs can be a literal lifesaver for people who truly need financial help because of a severe medical condition that prevents them from working for at least a year. Unfortunately, as with most things in life, there’s always someone looking to take advantage of the system. Fabricating a medical condition or financial situation in order to obtain benefits is illegal, but that doesn’t stop people from doing it.

Of course, determining which individuals may be engaging in fraudulent activity is easier said than done. This is why, along with their own investigative efforts, the Social Security Administration (SSA) also counts on the public to report disability fraud if they suspect someone of it. After all, abuse by fraudsters results in the SSA more closely scrutinizing, and sometimes denying, the applications of people who truly need assistance. But before we cover how to go about reporting disability fraud, let’s look at some numbers.

Is Disability Fraud a Big Problem?

Many believe that disability fraud is rampant, that hundreds of thousands of the 10+ million Social Security disability recipients are “faking it.” And while there are many examples of social security disability fraud out there, program statistics reveal that abuse is not as common as you may think.

In 2018, the SSA reported just under $100 million in recoveries, fines, settlements/judgments, and restitution as a result of Social Security fraud investigations. They further report that the majority of recovered funds were from recipients of Social Security Disability Insurance (SSDI), the program people pay into throughout their working life that allows them to collect should they become disabled and unable to work, and Supplemental Security Income (SSI), the program for low-income seniors, blind, and disabled people who do not have significant work history.

While $100 million sounds like big money—and don’t get us wrong, we’d all love to have that kind of money!—when you actually put it into perspective with the amount paid out annually, it’s relatively small. In 2018, the SSA paid out nearly $200 billion to beneficiaries of SSDI and SSI, so that fraudulent amount is actually just a mere .05% of the total. Plus, keep in mind that the recovered $98 million was for benefits paid out over several years, not just in 2018.

In addition, the SSA reports that not all improper payments are fraudulent; oftentimes, overpayments happen because of administrative delays at the SSA in making adjustments to benefit amounts due to errors and paperwork snafus.

A federal government list of programs at the highest risk for making improper payments compiled by the Office of Management and Budget does not even mention Social Security. “Outright fraud is actually a pretty small component of the program’s problems,” says Rachel Greszler, a researcher at the Heritage Foundation who studies Social Security.

Examples of Social Security Disability Fraud

Misuse of social security benefits can vary, but generally fall into the following four categories:

  • False statements. Examples include someone stating there have no sources of income when in fact they do, claiming to be unemployed when they’re doing a job and being paid “under the table,” or claiming to be bedridden when in fact they’re perfectly mobile.
  • Falsifying documents. Examples include using an altered Social Security card or altering medical documents.
  • Concealing information. Examples include not reporting an improvement in a medical condition, employment status, or a beneficiary’s death.
  • Misuse of benefits by the payee. A payee is appointed by the SSA to ensure funds are used for the disabled beneficiaries only; it is fraudulent for the payee to use it for themselves or others.

Penalty for Defrauding Social Security

The SSA doesn’t look kindly on fraud, and the penalty for misuse of Social Security can be severe. Each false statement a person makes, while knowing full-well that they are not eligible, can result in misdemeanor fines of up to $5,000. For people in “positions of trust,” such as doctors, translators, claimant representatives, and current or former SSA employees, that about increases up to $7,500.

Felony criminal penalties for Social Security fraud can set someone back up to $250,000 and can put them away for five years. For the aforementioned people in positions of trust, the punishment could be as much as 10 years in prison.

Identifying Social Security Disability Fraud

Despite evidence that shows disability fraud happens far less frequently than expected, Disability Experts of Florida believes any fraud is too much fraud. Before you report disability fraud, however, there are three things you should consider:

  • You must know the reason why someone has been approved for benefits. If you’re not sure, research will need to be conducted to uncover the truth before accusations are made.
  • Be certain that you fully comprehend the person’s situation, as working a regular job may complicate their condition more than you know. For example, the need for frequent medication throughout the day could leave them unable to hold down a job, or perhaps they need to make trips to the hospital on a weekly or even daily basis which conflicts with their job.
  • Be aware that even if you don’t see a physical disability and impairment, an individual may still suffer from an invisible disability such as mental or psychological disorders; these are not often easy to identify and you may not understand how they do, in fact, interrupt the person’s daily activities.

If you suspect someone is abusing the system in order to collect disability benefits, chances are you know them quite well. Making an outright accusation can destroy relationships, so tread carefully. The social security fraud investigation process can also be a long one and use up a lot of resources, so if you’re unsure, it’s probably best to first ask questions and look into the actions of the person to help you get to the bottom of the matter before reporting them.

How To Report Disability Fraud

If you suspect someone of committing a fraudulent act, here are the steps to take to report disability fraud.

  • First, contact the toll-free Social Security Administration Fraud Hotline at (800) 269-0271.
  • Explain in detail what type of fraudulent activity you suspect.
  • Provide as much information as you can about the individual potentially committing fraud, such as their name, address, phone number, and birth date and Social Security number if you know them. The more information you supply, the quicker the investigation can get underway.
  • Do not report anything that you are uncertain of; there are penalties for reporting false information, so stick with the facts only.
  • If you’re not comfortable calling the SSA Fraud Hotline, you can fill out a fraud report form online, or mail it to:

Social Security Fraud Hotline

P.O. Box 17768

Baltimore, Maryland 21235

No matter how you choose to report fraud to the social security disability hotline, you can request Confidentiality and Anonymity. You can also report disability fraud on behalf of yourself or a business.

Questions About Social Security Disability?

Social Security Disability programs benefit millions of people who truly need it; but there is always a bad apple in the bunch. Reporting misuse of social security benefits is important to ensure the right people receive the support they need, but it’s also a serious accusation that must be carefully considered. Before you report someone and an SSDI or SSI fraud investigation gets underway, be sure you have all the facts. And, if you have any other questions, you can always contact Disability Experts of Florida.

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