Depending on the number of times false reporting has occurred, penalties can vary for benefit fraud according to state. Benefit fraud is considered a federal offense and can carry with it serious forms of punishment. In an attempt to violate the welfare system, courts will often sentence the guilty party to restitution, fines, probation, community service, or incarceration.
Another penalty, that will most likely be endured as a direct result of benefit fraud, will be loss of future benefits depending on how many violations were committed. Determining the length of time that the benefits will be suspended will also depend on how many past convictions of benefit fraud the criminal has been sentenced to.