Fraud - Benefit Fraud
In this article we're going to cover another type of fraud that
is very common, especially in the United States. This is benefit
fraud.
Benefit fraud comes in all shapes and sizes. The bottom line is
the person who commits benefit fraud is receiving money from the
government that they are not entitled to. The number of ways to
commit benefit fraud is exceeded only by the amount of money
that it costs the government each year.
One way to commit benefit fraud is by not reporting some of your
income on your income tax such as if you have a savings account
with substantial earnings. This lowers the tax burden of the
individual thus lowering the amount of money they either have to
pay the government or raising the amount of the refund that they
receive.
Another way to commit benefit fraud is by misreporting the
number of dependent children you have in your home currently
living with you. A family with 3 children that only is
responsible for 2 of those children is legally not allowed to
claim the third child, especially if the child is either over
age or living in their own apartment or home. These children are
responsible for filing their own taxes. But benefit fraud is not
only limited to income taxes. Another area benefit fraud hits is
with actual benefits such as welfare and social security. In the
cases of people who are eligible for welfare or social security
these benefits are contingent on how much money they have either
made, are making or will make. In many cases these people will
either not report their income, which is easy to do if they are
retired and working a part time job, or they will only report a
portion of their income, under the amount that would lessen
their benefits. For example, if the maximum income a person can
earn and not have their social security affected is $6,000 and
they are earning $9,000 they won't report the additional $3,000
of income. This translates to benefit fraud.
It is estimated by the United States government statistics that
1.5 billion dollars are lost each year because of benefit fraud.
This money could have easily been spent on other government
services. This is one of the main reasons that benefit programs
such as social security and Medicare are deep in debt and in
danger of closing down.
The government does what it can to stop benefit fraud. Computer
systems compare information to determine whether or not
customers are entitled to benefits. For example, if someone was
paying National Insurance contributions on earned income and at
the same time their benefit claim showed that they didn't have
any earnings then that is an indicator that something is wrong.
This is how they crack down on violators.
Benefit fraud is a growing problem not only in the United States
but in many other parts of the world. Until measures can be put
into place that can guarantee that benefit fraud can no longer
happen, the problem is going to eventually drain each economy
until it reaches the point where these programs and the economy
itself will have a difficult time staying on its feet.