What is Disability Fraud?

Lainie Petersen
Lainie Petersen
Woman with hand on her hip
Woman with hand on her hip

Disability fraud is the exploitation of public or private disability insurance or benefit programs. In many cases, disability fraud involves an individual pretending or overstating the significance of a disability in order to benefit from programs designed to help and support the disabled. Other types of fraud include those of able-bodied people who take a legitimately disabled person's benefits for themselves or the failure of a disabled person to comply with program requirements such as reporting additional sources of income.

In many countries, people with disabilities may be entitled to certain benefits, including cash payments if they are unable to work, health care services, and other forms of assistance, including reduced or free transportation, household help, or mobility aids. The criteria for qualifying for these benefits varies between governments, but typically a disabled person must be able to document her impairment and show how it prevents her from working or caring for herself. If an individual or an individual's caretaker, such as a parent, overstates the nature of a disability so that an individual can receive these benefits, disability fraud has taken place.

A particularly insidious form of disability fraud consists of attempts by able-bodied people to exploit the very real disability of someone in their care. In some cases, vulnerable people who receive disability benefits have had these benefits taken from them by a caretaker who uses the benefits for himself and neglects the needs of the disabled person. In many areas, special protocols exist to detect and stop this type of exploitation.

In the United States and other countries that provide cash assistance to the disabled, a common type of disability fraud is the failure of the recipient of cash assistance to report income that is either earned through work or that comes from other sources. For example, recipients of Social Security Disability Insurance (SSDI) can qualify for this aid only if their disability makes it impossible for them to earn more than a very limited amount of money through work. If an SSDI recipient begins to take on odd jobs or freelance work and earns more than the work income cap set by Social Security, he has committed disability fraud and may lose his SSDI benefits entirely as a result. Similarly, a person who is receiving benefits from private disability insurance or who receives social services for which there is an income qualification and yet fails to report her own or a spouse's income may likewise be guilty of disability fraud.

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      Woman with hand on her hip