Welfare Fraud Statistics in the US 2026 | Key Facts

Welfare Fraud in the United States 2026

Welfare fraud remains a persistent concern in the United States social safety net system, though verified data reveals the actual scope differs substantially from public perception. The federal government reported approximately $247 billion in improper payments across all programs in fiscal year 2022, with approximately 70 percent resulting from insufficient documentation or administrative verification errors rather than intentional fraud. Welfare programs including SNAP, TANF, Medicaid, and Medicare collectively serve over 100 million Americans, creating complex administrative systems where errors, fraud, and legitimate payments coexist in ways that require careful measurement and understanding to address effectively.

The landscape of welfare fraud enforcement has intensified dramatically in 2025 and early 2026, driven by high-profile prosecutions including the $250 million Minnesota child nutrition fraud scheme involving 78 defendants charged in December 2025. This case, which FBI Director Kash Patel described as the tip of a very large iceberg, catalyzed federal scrutiny of state programs and prompted Congressional hearings scheduled for January and February 2026. Federal prosecutors examining Minnesota programs identified 14 high-risk Medicaid initiatives that have cost $18 billion since 2018, with prosecutors stating there is reason to believe that more than half of that amount was fraudulent. Understanding welfare fraud requires distinguishing between intentional criminal schemes, administrative errors, and the vastly larger category of improper payments that may not represent fraud at all.

Key Facts and Latest Statistics on Welfare Fraud in the US 2026

Data sources: U.S. Government Accountability Office, US Sentencing Commission, USDA Food and Nutrition Service, Centers for Medicare & Medicaid Services, Department of Justice, HHS Office of Inspector General, Congressional Research Service, Gitnux Statistics, FOX News

The statistics on welfare fraud reveal a complex picture where measurement methodologies, definitional categories, and public perception often diverge substantially. The federal government’s $247 billion in improper payments across all programs in fiscal year 2022 represents the most comprehensive measure, though approximately 70 percent of these improper payments result from insufficient documentation or administrative verification errors rather than intentional fraud. The 937 government benefits fraud cases reported to the US Sentencing Commission in fiscal year 2024 marked a 242 percent increase since fiscal year 2020, reflecting both increased enforcement and pandemic-related fraud schemes that created unprecedented opportunities for criminal exploitation of relief programs.

SNAP program data demonstrates the distinction between error rates and fraud rates. The USDA reported a 10.93 percent improper payment rate for fiscal year 2024, representing approximately $10.5 billion of $90.1 billion in outlays, but established fraud claims totaled only $68 million in fiscal year 2023, or 0.06 percent of benefits. The most recent USDA trafficking rate estimate from 2015-2017 found 1.6 percent of SNAP benefits were trafficked, indicating intentional fraud remains relatively rare compared to total program costs. However, EBT card theft has emerged as a serious new fraud vector, with Propel estimating $349 million stolen in the first half of 2025 alone through card skimming and cloning operations. The first quarter of fiscal year 2025 saw 226,000 fraudulent SNAP claims approved costing $102 million, up from $69.4 million the previous quarter, demonstrating accelerating theft patterns.

Government Benefits Fraud Prosecutions in the US 2024-2026

Data sources: United States Sentencing Commission, Lexington Law analysis, Department of Justice, Gitnux statistics, GovFacts reporting

Federal prosecution of government benefits fraud has increased substantially since the COVID-19 pandemic created opportunities for criminal exploitation of relief programs. The US Sentencing Commission documented 937 government benefits fraud cases in fiscal year 2024, representing a 242 percent increase from the 274 cases reported in fiscal year 2020. This dramatic surge reflects both the proliferation of pandemic-era fraud schemes and enhanced federal enforcement efforts through specialized task forces. The demographic profile of offenders shows approximately 67 percent are male with an average age of 46 years old, and notably, 68 percent of fraud offenders had little or no prior criminal history according to 2021 data, suggesting many engaged in opportunistic fraud rather than career criminality.

The scale of individual fraud cases varies dramatically, with 17 percent of benefits fraud cases in 2021 involving losses greater than $550,000, demonstrating that while fraud is relatively rare, individual schemes can reach substantial amounts. The Department of Justice’s COVID-19 Fraud Enforcement Task Force has charged over 3,000 defendants with crimes related to benefit fraud since its inception, with the most prominent example being the $250 million Minnesota Federal Child Nutrition Program fraud announced in December 2025 involving 78 defendants. Geographic concentration shows Florida, Nebraska, Ohio, and Virginia ranking as top locations for government benefits fraud offenders in 2021 data, though this may reflect enforcement priorities and resources rather than actual fraud distribution across states.

SNAP Improper Payments and Fraud in the US 2025-2026

Data sources: USDA Food and Nutrition Service, Government Accountability Office, Congressional Research Service, FOX News, Nextgov/FCW, Propel data, Gitnux statistics

The Supplemental Nutrition Assistance Program improper payment data reveals that most payment errors are not fraud. USDA reported a 10.93 percent improper payment rate for fiscal year 2024, representing approximately $10.5 billion of $90.1 billion in total outlays excluding disaster benefits. However, this improper payment measure includes payments with insufficient documentation, agency errors, and recipient mistakes alongside intentional fraud. State-reported established fraud claims totaled only $68 million in fiscal year 2023, or 0.06 percent of total benefits, indicating that documented intentional fraud remains exceptionally rare despite substantial improper payment totals. The Congressional Research Service analysis of fiscal year 2021 data shows states attempted to collect $54 million in overpayments related to recipient trafficking and application fraud, $85 million due to state agency errors, and $352 million resulting from recipient errors.

The most recent USDA trafficking rate study covering 2015-2017 estimated that 1.6 percent of SNAP benefits were trafficked, with approximately $1.27 billion trafficked annually during that period and 12.7 percent of authorized SNAP stores engaged in some form of trafficking. This retailer-focused measurement captures a major form of SNAP fraud but does not reflect all fraud types. EBT card theft through skimming has emerged as a significant new threat, with Propel company data estimating $349 million stolen in the first half of 2025 alone through card cloning and skimming operations conducted primarily by transnational crime rings. The first quarter of fiscal year 2025 saw 226,000 fraudulent SNAP benefit claims approved costing the government $102 million, up from $69.4 million the previous quarter and $31.9 million during the same period the year before. Alabama led states with over 26,000 stolen claims, followed by California with 25,818 and New York with 25,210, though these numbers may reflect reporting variations rather than actual theft distribution.

Medicaid Improper Payments and Fraud in the US 2025-2026

Data sources: Centers for Medicare & Medicaid Services, HHS Office of Inspector General, Medicaid Fraud Control Units Annual Report, Georgetown Center for Children and Families, GovFacts, Gitnux statistics

Medicaid improper payment rates have increased in recent reporting periods, with the Centers for Medicare & Medicaid Services reporting a 6.12 percent rate for fiscal year 2025, representing $37.39 billion, up from 5.09 percent or $31.10 billion in fiscal year 2024. However, 77.17 percent of fiscal year 2025 improper payments resulted from insufficient documentation rather than fraud, meaning reviewers could not verify whether payments were proper because required documentation was missing or incomplete. The fiscal year 2024 data shows 94.9 percent of federal Medicaid outlays, or $579.7 billion, were properly paid, with 5.2 percent of improper payments classified as technically improper where the payment was to the correct provider for the correct amount but administrative processes did not comply with applicable regulations.

Medicaid Fraud Control Units operating in all 50 states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands recovered $1.4 billion in fiscal year 2024, achieving a return on investment of $3.46 for every dollar spent on fraud investigation and prosecution. Criminal recoveries reached $961 million, the highest amount in the past 10 years and more than double the rolling 5-year average, with California’s MFCU contributing $513 million alone. Personal care service attendants accounted for 36 percent of fraud convictions, representing the largest provider category, while pharmaceutical manufacturers had the most civil settlements and judgments (76 cases) but accounted for only $14.2 million in recoveries. The scrutiny of Minnesota programs intensified following the $250 million child nutrition fraud case, with federal prosecutors identifying 14 high-risk Medicaid programs that cost $18 billion since 2018 and stating there is reason to believe more than half of that amount—over $9 billion—was fraudulent.

Medicare Fraud and Improper Payments in the US 2025-2026

Data sources: Department of Justice, Centers for Medicare & Medicaid Services, HHS Office of Inspector General, Government Accountability Office, Miller Shah LLP analysis, Factually reporting

Medicare fraud represents a substantial category of health care fraud, with the Department of Health and Human Services estimating a combined total of over $100 billion in improper payments for Medicare and Medicaid programs in fiscal year 2023, representing 43 percent of the government-wide total. Medicare Part D improper payment rates increased from 3.70 percent ($3.58 billion) in fiscal year 2024 to 4.00 percent ($4.23 billion) in fiscal year 2025, though these figures include both fraud and non-fraud errors. The Department of Justice’s 2025 National Health Care Fraud Takedown announced in June resulted in criminal charges against 324 defendants, including 96 licensed medical professionals such as doctors, nurse practitioners, and pharmacists, involving schemes with $14.6 billion in intended loss across 50 federal districts and 12 State Attorneys General’s Offices.

The 2025 takedown demonstrated significant enforcement coordination, with the government seizing $245 million in assets including cash, luxury vehicles, and cryptocurrency, while CMS prevented $4 billion from being paid in response to false and fraudulent claims and suspended or revoked billing privileges for 205 providers. Opioid-related fraud represented a major focus, with 74 defendants including 44 licensed medical professionals charged in connection with the alleged illegal diversion of over 15 million pills of prescription opioids and other controlled substances. Since the Health Care Fraud Strike Force inception in March 2007, these specialized units operating in 27 districts have charged more than 5,400 defendants who collectively billed Medicare, Medicaid, and private insurers more than $27 billion. The $556 million settlement with five Kaiser Permanente affiliates in California and Colorado represented the largest Medicare Advantage settlement to date, resolving allegations they pressured clinicians to upcode diagnoses to inflate payments.

Major Welfare Fraud Cases and Prosecutions in the US 2025-2026

Data sources: Department of Justice, State Auditors, U.S. Attorney’s Offices, HHS Office of Inspector General, Gitnux statistics, GovFacts reporting

The $250 million Minnesota Federal Child Nutrition Program fraud announced in December 2025 represents the largest COVID-era benefits fraud case in the nation, with federal authorities charging 78 defendants in connection with an organized scheme centered around the nonprofit Feeding Our Future. FBI Director Kash Patel characterized this case as the tip of a very large iceberg, prompting comprehensive federal scrutiny of Minnesota programs and Congressional hearings scheduled for January 7 and February 10, 2026. Specific defendants including individuals who received over $4.2 million through the scheme used fraudulent meal count claims and false documentation, with funds laundered through foreign textile trading companies and spent on luxury goods from retailers like Burberry, Louis Vuitton, and Canada Goose rather than feeding children as intended.

The Mississippi TANF scandal resulted in the State Auditor demanding $77 million in restitution in a massive welfare fraud involving Temporary Assistance for Needy Families funds, while the DOJ seized $1.4 billion in stolen relief funds intended for welfare programs between 2020-2023 across various cases nationwide. A 30-defendant ring in Georgia was sentenced for laundering $11 million in COVID-19 relief and welfare funds through shell companies, and the U.S. Attorney’s Office in Massachusetts recovered $26 million in affirmative civil enforcement cases involving federal benefit fraud in a single year. Health care fraud cases show similar patterns, with the sober homes fraud initiative resulting in charges involving more than $848 million of alleged false billing to Medicaid and Medicare for drug testing, and a Charlotte, North Carolina business owner sentenced to 200 months in prison for scheming to defraud the North Carolina Medicaid program of more than $11 million in September 2023.

Public Perception vs. Actual Welfare Fraud Rates in the US 2026

Data sources: YouGov polling, Congressional Research Service, USDA data, Gitnux statistics, Public perception surveys

Public perception of welfare fraud diverges dramatically from verified data, with YouGov polling showing 59 percent of US adults believe it is very common or somewhat common for people to lie and misrepresent their eligibility to benefit from SNAP, while actual data shows the trafficking rate at 1.6 percent and established fraud at 0.06 percent of benefits. The Congressional Research Service determined that for every 10,000 households participating in SNAP in 2016, about 14 contained a recipient who was investigated and determined to have committed fraud, demonstrating exceptional rarity. Half of US adults say it is very or somewhat common for people to lie about eligibility in TANF (50 percent) and Medicaid (46 percent) programs, though studies consistently find proven intentional fraud makes up between 1 and 3 percent of program budgets.

Trust levels correlate with fraud perceptions, with SNAP earning the lowest trust at 47 percent and TANF at 40 percent, while Medicare (57 percent) and Social Security (55 percent) command the highest trust levels. Social Security and Medicare are the only two programs where respondents say it is more uncommon than common for people to misrepresent eligibility, with 46 percent saying fraud is not very common or not at all common in both programs. The widespread confusion between improper payments and fraud contributes to perception gaps, with the public often interpreting reported improper payment rates as fraud rates when approximately 70 percent of improper payments result from documentation errors or administrative mistakes rather than intentional deception. Experts note that deliberate SNAP fraud is uncommon because of rigorous application processes and multi-step eligibility reviews, yet public belief in widespread fraud persists across demographic groups.

Federal Enforcement and Policy Changes in the US 2025-2026

Data sources: GovFacts, USDA Food and Nutrition Service, Centers for Medicare & Medicaid Services, Congressional reporting, Government Accountability Office, Department of Justice

Federal enforcement of welfare fraud intensified substantially in 2025 and early 2026 following high-profile cases, with the Trump administration freezing child care payments to Minnesota—funds that typically reach $185 million annually—pending audits of the 14 high-risk Medicaid programs identified by federal prosecutors. Minnesota has suspended payments to these programs and ordered third-party audits while Congress scheduled hearings for January 7 and February 10, 2026 to examine what went wrong in oversight that allowed the $250 million child nutrition fraud scheme. The One Big Beautiful Bill passed in July 2025 expanded SNAP work requirements significantly, moving the age exemption from 54 to 64 for adults without dependents and expanding mandatory work or training requirements to 80 hours per month, with changes taking effect in phases throughout 2026.

Twelve states have received approval to restrict SNAP purchases of certain items including soda, candy, and energy drinks as of late 2025, fundamentally changing what recipients can purchase and moving the program toward state-defined nutritious options. USDA has sent data requests to Democrat-controlled states warning that failure to comply will result in formal warnings and potential withdrawal of administrative funds, though this approach has drawn criticism for potentially being politically motivated. The National Accuracy Clearinghouse designed to prevent SNAP participants from illegally receiving benefits in multiple states began implementation in early 2024 but only 7 states have joined as of late 2025. USDA’s fiscal year 2025 budget request asks for an additional $11 billion for the Retailer Integrity and Trafficking program—a 30 percent increase—to combat fraud in SNAP and other nutritional assistance programs, while CMS prevented $4 billion from being paid in response to false and fraudulent claims leading up to the 2025 health care fraud takedown.

Administrative Costs and Detection Effectiveness in the US 2026

Data sources: Office of Justice Programs, Government Accountability Office, HHS Office of Inspector General, Gitnux statistics, ZipDo Education Reports

The cost-effectiveness of fraud detection efforts varies substantially across programs and jurisdictions. Medicaid Fraud Control Units demonstrate strong return on investment at $3.46 recovered for every dollar spent on investigation and prosecution in fiscal year 2024, suggesting well-designed enforcement can exceed costs. However, historical analysis including an Office of Justice Programs study of Texas showed that administrative costs of fraud detection often exceeded 25 percent of benefit payments in some welfare programs, with the state spending approximately $4 million annually on fraud unit salaries while reducing welfare costs by only $1.5 million through fraud detection. The Government Accountability Office estimated in 2015 that uncollected taxes combined with benefit fraud cost the government approximately $500 billion annually, though these figures aggregate multiple categories of losses.

Cumulative improper payments across all federal programs since 2003 have reached $2.4 trillion according to government reporting, though this total includes all improper payment categories rather than fraud alone. Technology investments show promise for improving detection effectiveness, with biometric verification systems reducing fraud by approximately 50 percent in some state implementations, while community education programs about proper reporting requirements have achieved 15-20 percent fraud reductions by helping recipients understand their obligations. Average fraud investigation duration ranges 4-6 months for typical cases, with detection rates varying by over 10 percent between states depending on enforcement resource allocation. Whistleblower reports and tips account for approximately 30 percent of fraud investigations initiated, while privatization of investigation functions has resulted in 25 percent faster case closure rates in some jurisdictions. Average recovery per individual fraud case typically ranges $1,000 to $10,000 depending on complexity, though large-scale organized schemes can reach millions.

Unemployment Insurance Fraud During the Pandemic in the US 2020-2026

Data sources: Government Accountability Office, DOL Office of Inspector General, Pandemic Response Accountability Committee, Congressional testimony, Department of Justice, state workforce agencies

Unemployment insurance fraud during the COVID-19 pandemic represents the largest category of verified welfare fraud in United States history. The Government Accountability Office estimated that fraud accounted for 11 to 15 percent of the total amount of unemployment insurance benefits paid during the pandemic, representing $100 billion to $135 billion stolen from the approximately $888 billion in benefits distributed through expanded programs. The Pandemic Unemployment Assistance program, which extended benefits to self-employed individuals and gig workers not traditionally covered, showed an improper payment rate of 35.9 percent, substantially higher than traditional unemployment insurance programs. Congressional testimony in March 2025 noted that outside estimates of total pandemic UI fraud range as high as $400 billion, though federal agencies use the more conservative $100-135 billion range for official reporting.

States reported identifying $55.8 billion in total overpayments including both fraudulent and non-fraudulent errors from March 2020 through March 2023, with $5.3 billion confirmed as fraudulent and $6.8 billion recovered including $1.2 billion in fraudulent payments. The Department of Labor Office of Inspector General opened over 200,000 investigations into unemployment insurance fraud since April 2020, representing a thousandfold increase compared to pre-pandemic levels when UI fraud made up only 11 percent of the OIG’s case inventory. As of January 2025, these investigations resulted in charges against more than 2,075 individuals, over 1,550 convictions, 39,000+ months of combined incarceration, and $1.1 billion in investigative monetary results including forfeitures and restitution. The DOL-OIG executed more than 1,050 search warrants and referred over 45,000 fraud matters back to states for action when cases did not meet federal prosecution guidelines.

State-Level Unemployment Insurance Fraud Variations in the US 2020-2026

Data sources: State auditors, state workforce agencies, FOX 9 News analysis, Department of Justice, DOL Office of Inspector General

State-level unemployment insurance fraud rates varied dramatically during the pandemic, with Minnesota showing under 1 percent fraud among $16.4 billion in pandemic UI payments while Kansas auditors estimated 25 percent of the $2.8 billion paid from January 2020 through February 2021 may have been fraudulent. Louisiana officials identified $405 million in fraudulent and ineligible claims paid to more than 97,000 accounts, representing 17 percent of the $6.87 billion in pandemic unemployment relief distributed. Ohio found 13 percent of unemployment payments were fraudulent, while Alabama, California, and Texas also documented significant fraud though specific percentages varied. The substantial variation between states reflects differences in verification systems, administrative capacity, fraud detection resources, and enforcement priorities rather than necessarily indicating higher actual fraud rates in some locations.

California fraud cases included high-profile prosecutions such as eight individuals indicted for conspiring to steal $25 million in unemployment benefits, with two defendants incarcerated at the time they filed fraudulent claims. Michigan’s improper waiver issues compounded fraud problems, with auditors projecting the state waived recoveries totaling over $65 million for 17,833 claims related to confirmed fraudulent overpayments despite federal guidance prohibiting waivers for fraudulent claims. Massachusetts created a simplified one-click waiver process for pandemic-era overpayments, though data availability issues prevented full analysis of the impact. New York reported zero waived amounts for pandemic programs despite acknowledging it waived overpayment recoveries, attributing the reporting discrepancy to ongoing IT system modernization. In total, 14 states acknowledged waiving recovery of overpayments but reported zero waived amounts for specific programs, creating substantial gaps in fraud recovery data.

Congressional Action and Statute of Limitations in the US 2025-2026

Data sources: House Ways and Means Committee, Congressional testimony, Department of Labor, DOL Office of Inspector General, Congressional Budget Justification

Congressional action on pandemic unemployment insurance fraud became urgent in early 2025 as the five-year statute of limitations approached expiration on March 27, 2025, exactly five years after the CARES Act passage. The House of Representatives passed the Pandemic Unemployment Fraud Enforcement Act in March 2025 to double the statute of limitations from five to ten years, allowing federal prosecutors to continue pursuing the 1,600+ ongoing fraud investigations and 157,000+ open hotline complaints documenting potential fraud. Chairman Jason Smith of the House Ways and Means Committee stated that if Congress did not act, criminals who stole money from taxpayers would escape prosecution, emphasizing that the Department of Justice focuses on sophisticated criminals including international crime rings, online scammers, and gangs rather than individuals who made inadvertent errors. The bill failed to advance in the Senate, leaving substantial questions about future prosecution capacity.

The limited recovery rate—approximately $5 billion recovered of $100-135 billion estimated stolen, or about 4 percent—demonstrates the challenge of recouping fraudulent payments even when fraud is identified. The Department of Labor’s fiscal year 2025 Congressional Budget Justification proposed provisions designed to provide expanded tools for preventing improper payments, with the Department estimating the proposals would result in savings of more than $3 billion over a ten-year budget window. Supplemental pandemic funding from Congress allowed the DOL Office of Inspector General to hire additional criminal investigators, resulting in the significant enforcement actions documented, though this temporary funding creates questions about sustained enforcement capacity. Inspector General access to state unemployment insurance data has been constrained, with the OIG emphasizing under the Inspector General Act it needs timely access to all UI program data to fulfill oversight missions. Congressional hearings scheduled for January 7 and February 10, 2026 will examine Minnesota fraud cases and broader program oversight failures.

Economic and Social Impact of Welfare Fraud in the US 2026

Data sources: Congressional testimony, Department of Justice, GAO reports, public opinion polling, program administrator statements

The economic and social impact of welfare fraud extends far beyond direct financial losses to affect program integrity, public trust, and access to assistance for legitimate recipients. Pandemic unemployment insurance fraud alone cost taxpayers an estimated $100 billion to $135 billion using conservative federal estimates, with outside analyses suggesting losses as high as $400 billion when including all schemes. These stolen funds financed criminal activities including illegal firearm purchases and drug trafficking according to Department of Justice prosecutions, with international crime rings, organized gangs, and sophisticated online scammers exploiting pandemic-era verification gaps. Identity theft victims numbered in the hundreds of thousands as fraudsters used stolen personal information to file false claims, creating additional harm beyond direct financial losses and requiring victims to spend substantial time resolving fraudulent claims filed in their names.

Public trust in government assistance programs declined measurably following widespread fraud reporting, with polling showing 59 percent of Americans believe SNAP fraud is very or somewhat common despite actual fraud rates under 2 percent. Legitimate recipients face increased stigma as fraud stories dominate media coverage, while enhanced verification requirements and administrative scrutiny create delays and barriers that affect people genuinely needing assistance. State budgets absorbed billions in unrecovered fraudulent payments, threatening program sustainability and prompting legislative responses including expanded work requirements and purchase restrictions that affect all recipients. The Minnesota $250 million child nutrition fraud case catalyzed federal scrutiny extending beyond that state, with administrators nationwide facing increased oversight, audit requirements, and potential funding freezes if compliance issues emerge. Federal spending on all assistance programs faces heightened Congressional examination, with fraud cases used to justify budget reductions and eligibility restrictions across programs regardless of actual fraud rates in specific initiatives.

Disclaimer: This research report is compiled from publicly available sources. While reasonable efforts have been made to ensure accuracy, no representation or warranty, express or implied, is given as to the completeness or reliability of the information. We accept no liability for any errors, omissions, losses, or damages of any kind arising from the use of this report.

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