Contrary to preconceived ideas, the majority of fraud comes from companies and the self-employed (56%), rather than from insured persons
Report on social security fraud: a fresh look at the figures and the players involved
Contrary to preconceived ideas, social security fraud is not mainly committed by insured persons, but mainly by companies and the self-employed. In fact, 56% of this fraud is linked to unpaid contributions, while fraud by insured persons accounts for only 34% of the total. This finding is one of the key conclusions of the latest expert report on social security fraud, commissioned by Elisabeth Borne when she was Prime Minister.
The report, published by the French High Council for the Financing of Social Protection (HCFiPS), estimates that social security fraud could reach a ‘theoretical potential’ of €13 billion a year. This impressive figure highlights the importance of stepping up prevention mechanisms, because although efforts to control and punish fraud are deemed significant, prevention remains the weak point of current policy.
Companies in the firing line
In public opinion, social fraud is often reduced to RSA fraud or false declarations of residence, thus fuelling a discourse directed against those on the lowest incomes. However, the HCFiPS stresses that more than half of fraud is attributable to businesses and the self-employed, particularly micro-entrepreneurs. The risks are greater for the latter, particularly when it comes to failure to declare contributions.
The report stresses that a systematic control policy, although it enables around €2.1 billion worth of fraud to be detected and stopped each year, has its limits: it mobilises costly human resources, can hinder access to rights for some, and risks stigmatising certain groups. What’s more, despite substantial investment, only €600 million is actually recovered.
Recommendations for a change of course
The HCFiPS recommends not focusing solely on control, but adopting preventive measures right from the design stage of new legislation, in order to limit ‘fraud-producing standards’ and avoid exploitable loopholes. The chairman of the HCFiPS, Dominique Libault, stressed the importance of maintaining a high level of civic-mindedness while implementing more robust preventive strategies.
Despite these recommendations, the HCFiPS does not comment on the potential impact of these measures on the Social Security deficit, which continues to grow. Nevertheless, it remains optimistic that the amounts of fraud can be significantly reduced if prevention strategies are improved.
In short, this report highlights the need to change the way we look at social fraud and to adopt policies that strike a balance between prevention, control and repression in order to better protect the financing of our social protection system.