NCPA - National Center for Policy Analysis

Less Welfare Going To Prisoners

November 23, 1999

Before the 1996 welfare reforms were passed, prison inmates were on an "honor system" which required them to tell the Social Security and Supplemental Security Income systems to stop sending them checks -- because they were locked up and ineligible for benefits. That didn't work so well.

So language was inserted in the bill allowing bounties to be paid to prisons for rooting out the fraud. Prisons were encouraged to cross-check inmate records with Social Security records. The bounties amount to $400 if a prison administrator reports an inmate receiving a check within 30 days -- or $200 if the report is made within 30 to 90 days.

That approach is working and the government is finally saving some money, according to a report from the General Accounting Office.

  • Some 40,000 prisoners were blocked from getting money between March 1997 and November 1998.
  • The savings is calculated at $75 million.
  • The SSA has paid about $10 million in bounties to the 3,115 prisons -- or about 60 percent -- which have responded to the program.
  • The average monthly Social Security payment for 1999 is $783 for a retired worker and $734 for a disabled worker -- while the maximum monthly SSI payment is $500.

Source: "Supplemental Security Income: Incentive Payments Have Reduced Benefit Overpayments to Prisoners," HEHS-00-2, November 1, 1999, General Accounting Office, Washington, D.C.; Cheryl Wetzstein, "Welfare Reform Takes Money from Prisoners," Washington Times November 23, 1999.


Browse more articles on Tax and Spending Issues