What Is The Penalty For Misuse Of SSDI Or SSI Funds?

Published on: November 28, 2023

Struggling with a disability is difficult in any number of ways – not the least of which is financially. If you have a disability that has rendered you unable to work, worrying about how you’ll pay your bills and continue to provide for yourself and your family can be very stressful.

Without question, Social Security disability benefits are an important source of financial support for millions of disabled individuals across the country. For that reason, most recipients make every effort to ensure that they are lawfully receiving their benefits and using them for their intended purpose. Unfortunately, however, this isn't always the case. There are times when benefits are obtained fraudulently and unlawfully.

It’s important to understand that the Social Security Administration takes fraud very seriously. In fact, it takes it so seriously that it has what is known as a zero-tolerance policy for fraudulently obtaining or using benefits. As a result, it is essential to understand exactly what fraud is and the various penalties that may be imposed for fraudulent behavior.

What is Social Security Disability Benefits Fraud?

In a nutshell, fraud is obtaining benefits that you would not otherwise be eligible to receive if you had not engaged in the fraudulent behavior. The Social Security Administration has clear, strict guidelines regarding the criteria that apply to qualifying for and receiving benefits. Intentionally disregarding those rules and attempting to obtain benefits without meeting the necessary factors may be considered fraudulent and carry significant penalties.

Common examples of disability benefits fraud include:

  • Returning to work and continuing to collect benefits. If an individual returns to work or earns an income above the “substantial gainful activity limit” established by the Social Security Administration, benefits should stop. Continuing to work and earn an income above the limit while still receiving benefits is considered fraudulent behavior.
  • Falsifying medical records. Medical records should be truthful, accurate, and reflective of an individual’s condition. When they are not, the Social Security Administration may have reason to suspect fraud.
  • Providing misleading information regarding income and resources when applying for benefits. Sometimes, individuals fraudulently overreport their previous salaries and work history and underestimate their current assets for the purpose of receiving a higher monthly benefit amount.
  • Concealing the death of a recipient from the Social Security Administration. Without question, if a recipient dies, the Social Security Administration should be notified. Collecting benefits on that individual's behalf without notifying the Social Security Administration is considered fraudulent behavior.
  • Filing a claim for benefits using another individual’s Social Security number. Claims should only be filed in an individual's own name. Doing otherwise is a fraud that may be investigated and prosecuted by the Social Security Administration.

If the Social Security Administration suspects fraudulent behavior, it will typically investigate the claim to determine whether or not fraud may occur. In some cases, this includes conducting what is known as a cooperative disability assessment.

What Happens During a Cooperative Disability Investigation?

The Social Security Administration may be alerted to fraud in any number of ways. Often, the source is someone who knows the individual and observes behavior that contradicts the claimed disability. Often, suspected fraud is reported to the Social Security Administration by providing information online or calling the Social Security Fraud Hotline at 1-800-269-0271.

If fraud is suspected, the Social Security Administration will typically send an investigator to assess the situation and conduct what is known as a Cooperative Disability Investigation, or CDI, for short. Ultimately, if a CDI reveals fraudulent behavior, there can be significant penalties. Penalties may include jail time of up to five years and a maximum fine of $250,000. For those in positions of trust who assist a recipient in making fraudulent claims, even more significant penalties may apply. These may include felony charges and up to ten years imprisonment.

Without question, fraudulent behavior is never advised when it comes to pursuing disability benefits. As with so many legal matters, if you have any questions regarding your disability claim concerning fraud, or any other matters, speaking with a knowledgeable and experienced attorney is always advised. At Disability Experts, we’re here for you.

Disability Experts – Here For You

At Disability Experts, we understand how important disability benefits are to our clients. They can ease financial stress and worry so that our clients can focus on their health and enjoy life with those they love. When you're pursuing a claim for disability benefits, you need a legal team on your side that knows and understands the law. At Disability Experts, we are that team. We’ll help you pursue the best legal strategies for your particular circumstances as you fight for the benefits you need and deserve. If you’re ready to get started, get in touch today. We look forward to speaking with you soon.

Contact Us

New Call-to-action