SOCIAL SECURITY FRAUD: PROBLEMS AND WAYS TO OVERCOME

Abstract

In most developed countries, fraud is defined as the intentional misrepresentation of relevant authorities in order to obtain undue advantages, which is classified as an administrative or criminal offense depending on the scale of the violation. It is important to clearly distinguish between fraud and corruption, taking into account possible errors on the part of both applicants and employees of authorized bodies. An error is considered as an unintentional submission of inaccurate or distorted information by the applicant, as well as the adoption by officials of decisions on the assignment of social benefits based on insufficiently substantiated or incorrect conclusions. At the same time, improper accrual of benefits can be caused by both individual factors and institutional features, in particular, an insufficient level of professional training of personnel, the complexity of regulatory and legal support and the multi-level nature of the social security system, which increases the likelihood of unintentional errors in the process of its functioning. One of the effective procedural tools for assessing the legality of the assignment and receipt of social assistance is verification, the main purpose of which is to establish whether the recipient meets the specified legislative criteria, whether he has an actual right to the relevant payments, or whether the payments were assigned as a result of the submission of false information, errors, or administrative inaccuracies. The leading tool for detecting the misuse of social benefits is the activity of the social inspectorate. However, the activity of social inspectors in modern conditions has low effectiveness. One of the determining reasons for the low effectiveness of control measures is the organizational dependence of the controller himself, because he checks the activities of the institution to which he himself belongs. Among other factors, it is worth noting the insufficient level of digitalization, the absence of a risk-based selection system for conducting inspections, as well as the excessive burden of inspectors with additional functions. A comparative study of international practice in implementing comprehensive anti-fraud mechanisms in social security systems demonstrates the need to implement targeted measures aimed at both minimizing abuse and reducing the level of official errors. The key elements of the system for combating fraudulent schemes should be: fraud prevention; fraud detection; fraud containment; evaluation of the effectiveness of anti-fraud measures and monitoring.