Judge Swank: In his own words

April 21, 2012

Last year, Drew A. Swank, an administrative law judge who handles disability claims for the U.S. Social Security Administration in Richmond, wrote an article titled “Welfare, Income Detection, and the Shadow Economy” for the Rutgers Journal of Law & Public Policy.

In that article, Swank, who denies 79 percent of the claims he hears, said he believes many people resort to fraud and deception when seeking government assistance.

Swank declined to be interviewed about his denial rate for Social Security Disability Insurance claims, saying he needed permission from the Social Security Administration. Here are excerpts from his Rutgers Journal article.

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This concern, that people other than those who actually need help are the ones actually getting it, has been around since the beginning of publicly-funded welfare benefits.

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Within every economy there are individuals who work “outside” the reported economy or in the “underground” economy; this sector is now commonly referred to as the “shadow economy.” The shadow economy complicates the issue of ensuring that only those individuals who actually meet the eligibility requirements of the welfare programs are the ones who actually receive the benefits. As our welfare rolls and outlays continue to grow with each passing year, the issues of eligibility and income detection become more and more important.

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More importantly, the number of people participating in these programs has been growing at a rate faster than the population growth of the United States, and the costs of these programs have grown exponentially in some cases. In an average month during 1992, thirty-four million Americans — 13% of the total population — were participating in one or more of the seven welfare programs.

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Some welfare recipients have a very strong incentive either to not report their earnings or to work in situations where their earnings are not reported so that their need-based welfare payments are not terminated. Some individuals may attempt to maintain their work efforts at just below the point where earnings income would terminate their disability benefits. Other individuals may choose not to report their work activity out of a mistaken belief that any earnings would automatically terminate their benefits.

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Ultimately, all that is being asked of people who apply for need-based welfare is to be truthful on their applications. Unfortunately, as shown by the prosecutions for welfare fraud and administrative termination and recoupment of benefits, not everyone tells the truth when applying for need-based welfare or subsequently reporting their income. Even if 99.9% accuracy was achieved in income detection and reporting, millions of dollars each year will still be lost just due to the immense size of our national need-based welfare programs. Some cheaters will slip through the cracks and others will be able to beat the system effectively regardless of the income detection and verification measures.


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