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State coffers €200 million richer due to fight against social fraud

16:49 20/11/2017

The federal government has claimed or reclaimed €201 million in the year to 30 September as part of its stepped-up plan to tackle social fraud. The term covers a number of situations related to individuals or companies, including unpaid social security taxes, wrongly paid benefits and social dumping.

The largest part of the sum, according to state secretary Philippe De Backer, has come from people or companies that have not paid the correct amount of social security taxes. Sometimes this is a mistake on their part, but most often it’s because of fraudulent activity such as unreported employment, fake self-employed statuses and social dumping.

Social dumping is when companies hire workers from lower-wage countries to perform work in higher-wage countries. They often successfully use systems to pay the workers in the wages of their home countries, and hence, the taxes go to those countries. The practice is illegal and most often happens in the construction and transport sectors.

A large sum has also been reclaimed from people receiving unemployment benefits to which they were not entitled. This is often because they were approved for a sickness benefit retroactively or because the income from freelance earnings was too high to quality for unemployment benefits that were paid out.

“We hired nearly 100 extra inspectors over the last several months and improved the co-operation between multiple services,” explained De Backer, the secretary responsible for social benefits. “All those efforts have delivered these positive results.”

Written by Lisa Bradshaw