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How much fraud is commited at social security
Executive Summary
Social Security improper payments and fraud are measurable but concentrated: recent Inspector General and Congressional reporting shows improper payments totalled roughly $72 billion from 2015–2022, with $23 billion unrecovered, yet confirmed criminal fraud cases and court-validated fraud losses are orders of magnitude smaller, measured in the low hundreds of millions annually [1] [2]. Analysts and agency reviewers underscore that most improper payments arise from beneficiary reporting errors, process weaknesses, and backlogs, not widespread intentional fraud, while program-specific problems—particularly in Supplemental Security Income—show higher improper-payment rates driven by unreported resources and administrative capacity constraints [3] [1].
1. The Big Number That Catches Eyes — Nearly $72 Billion, But Context Matters
The Office of the Inspector General report that identified nearly $72 billion in improper payments from FY2015–FY2022 is the headline figure driving public concern, but the IG places that amount in context by noting it represents less than 1 percent of total benefits paid during that span and includes both overpayments and underpayments [1]. The IG further highlights that $23 billion remains unrecovered, reflecting systemic challenges in recovery and prevention rather than proof that most payments result from fraud. The report links the bulk of improper payments to beneficiary self-reporting failures and insufficient controls in automated and manual systems, and it emphasizes long-standing, partially unimplemented recommendations — notably better data exchanges and automation — as the path to reducing these errors [1].
2. Fraud Versus Error — Confirmed Fraud Is Far Smaller Than Improper Payments
Multiple analyses and government statistics draw a clear distinction: confirmed criminal fraud cases have produced relatively small dollar losses compared with broader improper-payment totals. The Congressional Research Service reported that confirmed fraud totaled $88.05 million in FY2023, while the Inspector General’s broader improper-payment accounting reached billions [2] [1]. Investigations and prosecutions capture only a fraction of instanced wrongdoing; many improper payments stem from unintentional omissions or reporting lags. Several contemporary reviews concluded there were no systemic control failures amounting to widespread fraud, though they called for methodological refinements in estimating improper payments [4] [1].
3. Program Differences — SSI Shows Higher Vulnerability Than OASI/DI
Program-level breakdowns change the narrative: the Supplemental Security Income (SSI) program exhibits a notably higher improper-payment rate than Old-Age, Survivors, and Disability Insurance (OASI/DI). The Inspector General and SSA reports show the SSI improper-payment rate rose to 10.62 percent in 2023, equating to about $6.5 billion, largely driven by failure to report countable financial resources and the agency’s reliance on beneficiary self-reporting [3]. By contrast, OASI/DI improper payments are a much smaller share of total benefits. This divergence highlights that policy design and beneficiary reporting requirements, not a single monolithic fraud problem, explain much of the exposure [3] [1].
4. Backlogs, Staffing, and Process Gaps — Why Errors Persist and Grow
Agency backlogs and capacity constraints materially affect improper payments. An Inspector General memorandum documented a record backlog of 5.2 million pending actions as of February 2024, which increased improper payments by over $1 billion and reflects staff reductions and funding pressures [5]. The IG links slower processing and less frequent verification to larger, lingering overpayments and underpayments, and repeatedly urges improved data-sharing, automation, and implementation of prior recommendations. The evidence points to operational weakness, not necessarily fraud intent, as the driving cause of many improper payments [5] [1].
5. Reconciling Claims and Policy Implications — What the Data Supports and What It Doesn’t
Public claims of rampant Social Security fraud — for example assertions that a large share of phone-based direct-deposit changes are fraudulent — are not borne out by recent operational reviews: after adding anti-fraud phone checks, SSA found only two potential fraud cases among 110,000 reviews, prompting reconsideration of rules that slowed service [6]. Analysts argue that alarmist figures conflate improper payments, which include errors, with intentional fraud, and some policy interventions intended to curb fraud have unintended service costs. The IG and CRS recommend focusing on better data, refined sampling and estimation methods, targeted enforcement, and resource allocation to SSI and backlog reduction to reduce improper payments while avoiding erosion of service [6] [2] [4].