Social fraud costs Social Security 13 billion euros each year, according to a report presented on September 25. Far ahead of social benefit fraud, it is illegal work which accounts for the largest amount of fraud.
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– Social benefit fraud is not as important as one might think.
We talk about it regularly but the overall figures have never really been released until now. At the request of government in June 2023the High Council for Financing Social Protection (HCFiPS) set out to detail the amount of social fraud. In a report on the fight against social fraud, published this Wednesday, September 25, the organization attached to Matignon estimates that 13 billion euros per year lost profits due to these intentional errors. That is almost six times less than tax fraud, estimated at between 60 and 80 billion euros per year. This is an assessment of the theoretical potential for fraud for all branches of Social Security (family, health insurance, recovery of contributions, old age, work accident and autonomy).
Unsurprisingly, it is hidden work that costs Social Security the most. The fraud is estimated at 6.91 billion euros. “Most of the fraud finds its origin in the losses associated with contributions”underlines the report. This document shows that, contrary to popular belief, the amounts of fraud on social benefits are low. “RSA fraud, on which attention is often focused, represents 1.5 billion euros out of all the fraud assessed, 2.5 billion euros if we add the activity bonus”it is written. The HCFiPS also dismantles the preconceived idea according to which “false centenarians” would cost old age insurance dearly while the amounts are “very insignificant”of the order of 40 million euros in total for the old age branch.
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More than 2 billion frauds detected
If these 13 billion represent the estimated fraud, the anti-fraud actions carried out by Social Security organizations make it possible to detect 2.1 billion frauds per year. Here again, it is illegal work which is singled out 814 million damages observed or avoided in 2023, far ahead of the damage noted by the family branch of Social Security (374 million euros) which pays in particular family allowances.
Problem with these frauds actually detected, the lost sums are rarely recovered. Only 600 million euros per year are recovered. Of the total estimated fraud (13 billion), this represents barely 5% of the amounts involved. It is mainly on missing contributions linked to illegal work that it is most difficult to recover the amounts due. Main reason: fraudulent companies quickly disappear into thin air. As a result, for undeclared work, recovery is limited to 80 million euros compared to 296 million euros for the family branch and 200 million euros for health insurance.
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Areas for improvement
Beyond the intensification of controls “which have already been greatly developed in recent years”according to Dominique Libault, the president of the High Council, efforts must be focused on prevention, by working in particular on the reliability of data, support for health professionals and even the standards which govern social services. “A standard that is too permissive can give rise to criminal behavior such as the excesses that we have observed in the reimbursement of hearing aids within the framework of 100% health”gave Dominique Libault as an example, during a press conference organized this Wednesday, September 25. The High Council also recommendsimprove relationships between different organizationsfor example between Health Insurance and complementary health insurance, which would allow information to be cross-referenced on possible fraudulent acts.
To limit this risk of fraud, the HCFiPS encourages continuing the work of simplification of services paid by harmonizing resource conditions in particular. “A social reference income could be established which would limit the number of errors”suggests the president. But the fight against social fraud is far from being the miracle solution. “Even by intensifying the fight against this fraud, it is unreasonable to think that this would be the only lever to return to the financial balance of Social Security”warns Dominique Libault.
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