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NYC first responders indicted for SSDI fraud. How common is it?

Last week, prosecutors in New York announced the indictment of 106 people, including former members of the New York City fire department and the NYPD. According to the charges, between 1988 and the end of last year, the former police officers and firefighters allegedly conspired with facilitators to obtain Social Security Disability Insurance for pretended mental disabilities, including some claims for PTSD brought about by service during the 9/11 tragedy.

The allegations are certainly disturbing. According to prosecutors, the conspirators succeeded in obtaining an estimated $22 million in fraudulent SSDI benefits. This, along with two Social Security disability fraud schemes discovered earlier this year, prompted the chair of a U.S. House Social Security subcommittee to hold a hearing yesterday to find out what the Social Security Administration is doing to crack down on fraud.

This and all Social Security disability fraud is extremely damaging. It harms taxpayers, but it also does a great deal of harm to legitimate recipients. For many people who receive SSD for qualifying mental conditions, these particular allegations feel like an attack on the legitimacy of their claims.

Fraud also encourages false beliefs about the program. It allows people to conclude that qualifying for SSDI is much easier than it actually is, and it encourages opponents of the program to believe that many people who rely on the programs are simply refusing to work. So how common is Social Security disability fraud, really?

Fraud constitutes less than 1 percent of all Social Security disability outlays, according to former Social Security commissioner Michael J. Astrue, after National Public Radio ran a harshly critical story earlier this year that called SSD 'secret welfare.' Astrue also pointed out that Social Security disability is far more likely to underpay beneficiaries than to pay fraudulent claims.

Moreover, as a disability advocate writing for the Hill pointed out, the SSA’s administrative budget is extremely lean, equaling only about 1.4 percent of the benefits it pays out. At the same time, Congress has recently been cut back on the agency’s administrative resources, meaning that it has less funding available to fight fraud.

If you or a loved one has applied for Social Security disability, you know  it can be hard to qualify even when you have a valid claim. The truth is that most beneficiaries are genuinely disabled from meaningful work, and the program is a desperately-needed lifeline to basic subsistence.

Sources: 

  • The Hill, "Social Security disability fraud is rare," Katy Neas, Jan. 16, 2014
  • Hearing Advisory, "Chairman Johnson Announces Hearing on Social Security Disability Fraud Scheme in New York," U.S. House of Representatives Committee on Ways and Means, Jan. 9, 2014

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