What about welfare fraud?

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Many of us cheered the recent arrest of a wealthy Minnesota couple accused of fraudulently receiving over $167,000 in medical and SNAP benefits while living the high life. A question many people are probably asking is, “How did they do it?” It’s tough to say for sure, but based on news accounts, their alleged scheme sounds very elaborate.

Applying for any kind of government benefit requires pretty extensive documentation. Depending on the program, applicants may be asked to provide things such as:

  • Photo IDs or birth certificates for every household member
  • Proof of income (such as pay stubs or self-employment tax records) for every household member
  • Citizenship documents
  • Proof of assets such as bank accounts, retirement accounts, and property
  • Proof of residence and housing costs, such as signed form from a landlord or a copy of a mortgage receipt
  • Documents about legal obligations such as child support or alimony
  • Medical records proving a disability

Can some of these documents be falsified? Certainly. People really determined to lie will find ways to lie, whether on their taxes, resumes, or benefits applications. Government benefits workers have finite time and ability to verify the authenticity of every single document (and doing so might be quite invasive, such as calling a boss or landlord) and obviously don’t have a fail-safe way to investigate income or assets that isn’t ever reported in the first place.

That doesn’t mean that we should throw the baby out with the bathwater by making it more difficult for people to apply for economic supports. Given that fraud rates are incredibly low (for instance, 98 percent of SNAP benefits are paid to eligible households), making the application process more invasive would deter far more people in real need than people determined to cheat the system. We might shut out a few fraudsters, but we could also shut out many, many more people who really are in poverty but have limited time or ability to jump through a dozen more hoops.

I already work with many clients who would benefit greatly from some extra income support or health insurance but just aren’t willing or able to deal with the application process and ongoing reporting requirements.

Technological improvements might provide a middle ground between verifying more information and maintaining accessibility for people in need. For instance, MNsure has (or is in the process of developing) the ability to compare applicants’ reported citizenship status, Social Security number, income, etc. against federal records. Those with discrepancies are asked to provide more proof. Bringing all benefits applications under this MNsure framework would increase accuracy while reducing the amount of paperwork that most clients have to send in.

While the media loves a good sensational “welfare fraud” story, the truth is that most of our government’s economic supports really are going to people who are rightfully eligible for them. I’m as horrified as anyone else about fraud, and I hope offenders are brought to justice. But I also hope that we continue to improve not only the accuracy, but also the accessibility, of our support programs for those in need.