How much does welfare fraud really cost American taxpayers? 3 shocking numbers you must know as $1B ‘massive fraud’ scandal roils Minnesota

“These massive fraud schemes form a web that has stolen billions of dollars in taxpayer money,” acting U.S. Attorney Joseph H. Thompson said in a statement. (1) “Each case we bring exposes another strand of this network. The challenge is immense, but our work continues.”

One of the scams, perpetrated by a nonprofit called Feeding Our Future, which claimed to provide free meals to school children, allegedly “submitted fake meal count sheets and invoices to trick state and federal officials into thinking they had helped serve food to thousands of children,” collecting millions of dollars in the process. (2)

Another group, meanwhile, allegedly used kids from the state’s large Somali community as pawns in an autism therapy scheme and, in return, gave their parents a taste of the profits they defrauded from the government. (3) And the state actually shut down its Housing Stabilization Services program, which aimed to house older people and those with disabilities, in August after “credible allegations of fraud” by multiple companies that they say “received millions in Medicaid money for services they didn’t provide.” (4)

Playing the blame game

The New York Times noted that one lawyer for a number of the accused in the various fraud cases claimed that “some involved became convinced that state agencies were tolerating, if not tacitly allowing, the fraud.”

Others, including President Donald Trump, placed blame on Minnesota Governor Tim Walz, as well as members of the Somali community — including the president calling Somali immigrants “garbage” who “contribute nothing” — after a number of Somalis were accused of taking part in the schemes. (5)

“Minnesota is a generous state. Minnesota is a prosperous state, a well-run state … But that attracts criminals,” Walz countered. (6) “Those people are going to jail. We're doing everything we can. But to demonize an entire community on the actions of a few, it's lazy.”

The House Oversight Committee, meanwhile, announced an investigation into the matter. (7)

Welfare and fraud by the numbers

The term “welfare” is often loaded with misconceptions. That’s why it’s important to note that, when discussing welfare, the term encompasses a wide swath of social service programs that provide public assistance, from SNAP benefits to Medicare.

As this Minnesota mess continues to garner headlines and spark national conversations, here are three shocking numbers you should know when it comes to welfare and fraud in America.

1. $4 trillion

The approximate amount that the federal government spent on social services and assistance programs for fiscal year 2024, according to the non-partisan research institute Center on Budget and Policy Priorities (CBPP). (8)

According to CBPP, the roughly $4 trillion breaks down to $1.7 trillion for healthcare-related programs (ACA subsidies, CHIP, Medicaid, Medicare, etc.); $1.5 trillion for Social Security; the vast majority of the $526 billion for veterans benefits, which includes “disability payments or medical care, which is often specialized”; and $476 billion spent on “economic security programs” that include programs like SNAP, unemployment insurance and others.

For context, in 2025 more than nine million Americans benefitted from housing assistance (9), more than 42 million Americans received SNAP benefits (10) and more than 77 million enrolled in Medicaid and CHIP. (11) It’s a small snapshot but it offers some perspective on the wide range of programs that fall under the “welfare” umbrella in the U.S., and how many Americans rely on them to maintain a basic living standard.

2. $521 billion

This is the top end of what the Government Accountability Office (GOA) estimates that the federal government overall loses every year to fraud. (12) The range they estimate is $233 billion to $521 billion. However, it’s important to understand that that range accounts for fraud across all sectors of government — not specifically “welfare fraud.”

In fact, there aren’t federal numbers available that specifically isolate the cost of welfare fraud annually in the United States though, in some cases the numbers can be gleaned through government reports. For example, in fiscal year 2021 Congress notes that, when it comes to federally funded SNAP benefits, “state agencies attempted to collect $54 million in overpayments resulting from recipient trafficking and recipient application fraud.” (13)