Harsh New Penalties for Social Security Fraud

Congress has created a new law which makes Social Security fraud a felony punishable by up to five years in prison and $250,000 in fines. The law also imposes even stiffer penalties for “individuals in positions of trust (including claimant representatives, doctors and other health care providers, translators, and current or former Social Security Administration [SSA] employees) who use their specialized knowledge to defraud the SSA.” In these fraud cases, the “maximum felony penalty is from five years to ten years, in addition to fines (generally up to $250,000). [And it] increases the maximum Civil Monetary Penalty (CMP) that the SSA can levy against individuals in a position of trust from $5,000 to $7,500 for each false statement, representation, conversion, or omission the individual makes or causes to be made.”

The new, harsher penalties were inserted into a two-year budget deal struck between Congressional Republicans and Democrats in October and were crafted to address concerns by conservative lawmakers who maintain there is widespread fraud in the Social Security disability program. They point to a news report from the Associated Press which quotes an SSA Inspector General’s investigation which revealed, in part, “A small group of Social Security judges have improperly approved disability claims for nearly 25,000 people who didn’t qualify, costing taxpayers $2 billion over the past seven years.”

However, Eric Laursen reporting for alternet.org (a news website from the non-profit Independent Media Institute) says, “Big problem, right? Actually, no. That $2 billion in improper payments over seven years came to less than 0.3% of the $900 billion in disability payments the SSA made during that period. Indeed, it’s almost ridiculously hard to qualify for disability benefits under the present system. According to the Center on Budget and Policy Priorities, only 37% of applicants were awarded benefits between 2009 and 2011, and 14% of those approvals came on reapplication or appeal. Not only that, but thanks to a chronically underfunded SSA with too few administrative law judges to do the job, the process can take years, leaving many qualified applicants ruined or even dead before they receive a check.”