Unethical use of social welfare benefits

Some companies knock social security contributions off their employees' salaries but tell to the officials that they have smaller staffs than is the case. Multinational companies pay enhanced salaries for working overseas and declare only a "phantom" wage. In the UK in 1993 it was estimated that the level of social security fraud is an estimated £1 billion per year. In Spain in 1993, with 23% of the labour force registered as unemployed and 2.6 million collecting welfare benefits, it was widely recognized that jobs taken by people whilst unemployed were increasing dramatically. In the UK in 1994 it was reported that about 4,000 prisoners had been successfully claiming social security benefits totalling up to £9 million despite being resident in jail. In 1992 in the UK local authorities were warned by government not to inform elderly and disabled people of the care that they needed if it could not be paid for from available funds.

It is claimed that people are taking advantage of reciprocal welfare benefit rights in the European Economic Area (EEA) countries by moving between countries.