Abstract

The effectiveness of welfare-state benefits is measured, not least, by whether they actually reach the population groups in need. Only under this condition can adequate social protection be ensured. Accordingly, both the non-take-up of social benefits and their fraudulent receipt constitute important indicators of ineffective policy design and shortcomings in the institutional and administrative implementation of social support. In the former case, existing legal entitlements are not claimed, leaving needs unmet; in the latter case, benefits are granted despite the absence of entitlement. Although both phenomena point to significant dysfunctions in welfare-state provision, public debate has focused primarily on the misuse of social benefits. Attention is frequently directed toward means-tested benefits, such as those provided under the basic income support scheme for jobseekers. This emphasis is hardly surprising, as the fraudulent receipt of public benefits not only constitutes a violation of the law but is also perceived as a breach of widely shared notions of solidarity and fairness. Moreover, the issue is often discussed on the basis of highly sensationalized individual cases and thus entails considerable potential for scandalization. This tendency is further reinforced by overlaps with other societal conflict areas, most notably migration-related debates. The recent discussion surrounding organized fraud in basic income support in the context of EU free movement regulations for workers underscores this dynamic. Despite the prominence of the issue, relatively little is known about the actual extent of benefit fraud in the basic income support scheme for jobseekers and its structural determinants. One reason is the absence of a legal basis for a uniform nationwide data collection. As a result, the annual figures published by the Federal Employment Agency on benefit fraud under SGB II refer only to joint institutions, while data from municipal providers are not included. More importantly, these statistics capture only initiated and completed criminal and administrative offense proceedings and thus reflect merely the so-called “known cases.” Academic research on fraud in the German welfare state has, in turn, been predominantly legal or discourse-analytical in nature. While some studies aim to quantify such phenomena—most recently, for example, Bossler et al. (2023) on the misuse of short-time work benefits—they focus on other areas of social policy. This study addresses these gaps by examining benefit fraud under SGB II. First, using data from the web survey of the Panel Study “Labour Market and Social Security” (PASS), it seeks to estimate the prevalence of various dimensions of benefit fraud, including unreported earned income vis-à-vis jobcenters. To this end, a specialized survey method is employed that enables the collection of sensitive information and reduces bias due to socially desirable responding. Second, the third wave of the IAB Jobcenter Survey (OnJoB) is used to survey professionals and managers in placement and benefits departments regarding the relevance, forms, and handling of benefit fraud in their jobcenters. In addition, information on organizational procedures for identifying and prosecuting benefit fraud is collected.