Sweden: Fraud and Abuse of Welfare Systems
| Pages | 396-405 |
| Date | 01 February 1998 |
| Published date | 01 February 1998 |
| DOI | https://doi.org/10.1108/eb025855 |
| Author | Bo Sandberg |
| Subject Matter | Accounting & finance |
Journal of Financial Crime — Vol. 5 No. 4 — International
Université de Grenoble II, France; and a DEA (LLM)
in International Economic Law from the Université
de Paris I (Sorbonne). She is currently undertaking
her PHD at the
IALS,
and is a consultant in the
Directorate of Financial, Fiscal and Enterprise
Affairs, OECD. The views expressed in this paper
are those of the author and not those of the OECD
or of its member countries.
Sweden:
Fraud and Abuse of Welfare Systems
Bo Sandberg
INTRODUCTION
The issue of fraud and the abuse of the social
welfare system has become increasingly topical in
most industrial countries with the greater difficulty
in funding public sector expenditure. With large
budget deficits, low economic growth and high
unemployment, tolerance for different forms of
abuse generally decreases. This trend also applies
in Sweden.
On 14th April, 1994, the Swedish Government
gave the National Audit Office (RRV) the task of
identifying the frequency of the abuse of social
benefits and allowances. In December 1994, the
government commissioned RRV to establish the
extent of the abuse of unemployment benefits and
unemployment cash allowances. In connection
with this, the government also gave RRV the right
to compare certain Electronic Data Procedures
(EDP)-based personal registers in order to detect
any occurrence of unjustifiable exploitation of
social benefits.
RRVs task covers a broad range of various
issues and subject areas. The types of social benefit
which have been primarily studied are early retire-
ment pensions, unemployment insurance funds/
unemployment cash allowances, advances on
maintenance/maintenance allowances, housing
allowances, sickness benefit and parental allowan-
ces.
Furthermore, RRV has studied the occurrence
of double disbursements of different types of social
welfare contributions, fraud among medical doc-
tors as well as the appropriateness of controls and
control systems both in Sweden and in certain
other relevant countries.
According to RRVs interpretation of its task, the
following three questions must be studied and
answered:
— How extensive is the abuse of social insurance
and unemployment benefits? Where is the line
drawn between what is fraud and what is abuse?
— Are there any differences between Swedish
nationals and foreign nationals with regard to
the tendency to commit fraud?
— Are the existing controls and control systems
appropriate or can they be improved?
In this study, the term 'fraud' is used to describe
the situation when the claimant for a particular
social benefit submits incorrect or incomplete
information in order to satisfy the criteria for
obtaining the benefit in question. Thus, the study
does not cover internal controls in the more tradi-
tional sense of the type of unintentional errors or
intentional errors (eg swindling) committed by the
employees in an organisation which is responsible
for disbursing benefits.
RRV has put forward a number of proposals for
possible measures to correct the deficiencies which
have occurred. The balancing of the consequences
of these proposals in terms of, on the one hand,
eficiency and, on the other hand, personal integrity
or confidentiality, is entirely a political considera-
tion which must be made by the Swedish Parlia-
ment and Government.
RRVs task involves a great deal of statistical
uncertainty. For this reason, the approach has been
to try to establish the relationship between the
reported fraud which has been detected by the
administration (visible) and the actual fraud com-
mitted. There are several reasons why there is a
great deal of statistical uncertainty. Very few sys-
tematic studies have been made of fraud and
abuse.
Furthermore, the fraudulent individuals do not
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