A welfare fraud refers to several intentional misuse of the state welfare system. This is done by giving false or incorrect information and withholding information. This could be done in uncoordinated, small efforts or in bigger and more organized criminal schemes.

Some of the common kinds of welfare fraud include failure to report household members, failure on reporting income, providing false information, claiming imaginary dependent or dependents. In general, this kind of fraud usually consists of a person who acquires benefits that he or she does not deserve. An error could occur where the recipient collects benefits in his or her name even if he or she does not qualify. Moreover, one could also collect benefits in behalf of a person who will never receive these funds.

Welfare fraud proved to be rather costly. It costs the system million of dollars in misused benefits each year. In the US, the penalty for this fraud warrants felony conviction and could send one to prison for many years. Today, there are several states that offer big rewards for people who report this fraud due to the alarming growth of this crime. This fraud does not only affect the government but it also robs people who truly deserve these benefits.