On and Off

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51517785 - padlock and social security card - identity theft and identity protection concept

Marital status can affect a person’s ability to receive Social Security disability benefits. Today’s fraud article tells about a Bastrop, Louisiana woman who initially qualified to receive disability benefits based on her marital status. (She was separated from her husband at the time of her application.) However, she disqualified herself from the government program by living with her husband on and off over seven years. During that time, she committed more than $40,000 in Social Security disability fraud by lying about her living situation.

Here’s a brief primer on disabilities fraud so you can understand how a person’s marital status plays into the problem. The Social Security Administration (SSA) manages two disability programs – Supplemental Security Income (SSI) and Social Security Disability Insurance (SSDI). SSI is funded through general fund taxes and is strictly based on financial need, not work history. In a nut shell, to meet SSI income requirements, an individual must have less than $2,000 in assets or a couple must have less than $3,000 in assets and a very limited income. (A spouse’s income would be factored into the total amount of assets and could disqualify the other spouse from receiving monthly disability payments.)

SSDI is funded through payroll taxes because recipients have worked a certain number of years, making contributions to the Social Security trust fund through FICA taxes. For example, today’s fraudster is 40, so she would have had to work at least five of the previous 10 years to earn qualifying credits. (Because qualification is based on the number of years worked, marital status and spousal income will not impact the amount a qualified individual can receive.)

Now that you’re more knowledgeable on these two Social Security disability programs, let’s get back to today’s case. The woman in the fraud article married her husband in 2000. Nine years later, she applied for disability benefits citing that she was separated from her husband. She qualified for the benefits based on her marital status and collected $40,569 over about seven years, until her husband died in 2016. If she had been honest about the fact she was still living with her husband, their combined income would have put her over the threshold for receiving the government benefits. (This points to SSI benefits, even though the article does not explicitly mention the type of benefits she received.)

During an interview with the SSA following her husband’s death, the Louisiana woman admitted that she had lived with her husband on and off for seven years despite claiming she was separated. When sentenced, she is facing up to 10 years in prison, three years of supervised release and a $250,000 fine.

While the perpetrator was legitimately separated from her husband when she applied for government benefits, she neglected to correct her claim when she moved back in with her husband several times over seven years. Maybe she didn’t completely understand the program rules, or she was just plain lazy when it came to completing the necessary paperwork. Regardless of whether her fraud was intentional or not, the bottom line is that this on again off again woman committed Social Security disability fraud and now she has to deal with the consequences of her actions.

 Today’s “Fraud of the Day” is based on an article entitled, Bastrop woman pleads guilty to stealing more than $40K in Social Security benefits,” published by The News Star on March 5, 2018.

United States Attorney Alexander C. Van Hook announced Monday that a Bastrop woman pleaded guilty to stealing more than $40,000 in Social Security Administration benefits.

Katie Marie Day, 40, of Bastrop, pleaded guilty before U.S. Magistrate Judge Karen L. Hayes to one count of theft of government property.  The plea will become final when accepted by U.S. District Judge S. Maurice Hicks Jr.

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Larry Benson
Larry Benson is currently the Director of Strategic Alliances for Revenue Discovery and Recovery at LexisNexis Risk Solutions. In this role, Benson is responsible for developing partnerships for the tax and revenue and child support enforcement verticals. He focuses on embedded companies that have a need for third-party analytics to enhance their current offerings.