How Much Money Do We Really Waste on Working-Age Adults Receiving Government Benefits

One of the first places many Americans look when discussing government waste, deficits, or unfairness is long-term dependency among working-age adults receiving public assistance. The outrage is understandable. But this issue is emotionally charged, politically polarized, and often discussed with far more heat than precision, so it is worth slowing down and examining the actual numbers, the real scale of the problem, and the realistic opportunities for reform.

There is no official budget category called “dependency spending.” That makes the issue hard to measure precisely. But we can look at the major programs that support low-income working-age adults and ask a practical question: how much of this spending goes to people who might be able to work more, become more self-supporting, or move toward independence if incentives, expectations, and support systems were better designed?

The answer is not a small number. Depending on definitions, the amount likely reaches hundreds of billions of dollars annually across federal and state programs. However, much of this spending also supports people with real physical, mental, or economic limitations, as well as low-income workers already participating in the labor force. This is not a clean category of “money wasted on people refusing to work.”

Start With the Big Picture

The modern American safety net is built primarily around healthcare, food assistance, disability support, housing aid, and income supplements for low-income households. The largest programs connected to this discussion are Medicaid, SNAP, disability programs like SSDI and SSI, housing assistance, and refundable tax credits such as the Earned Income Tax Credit.

Medicaid is by far the largest program in this conversation. Total Medicaid spending in fiscal year 2024 was estimated at roughly $909 billion, including both federal and state spending. Much of that money goes to children, disabled individuals, elderly nursing-home care, and other vulnerable populations. But Medicaid expansion also covers millions of working-age adults, including many adults without dependent children.

Other major programs are smaller but still significant. SNAP spending has recently been around $100 billion annually. Federal disability programs distribute hundreds of billions more through SSDI and SSI. Housing assistance, refundable tax credits, and related state-administered benefits add additional layers of support.

Estimated Annual Spending Connected to Long-Term Dependency

The table below gives some numbers for broad program areas where a meaningful portion of spending supports working-age adults with weak labor-force attachment, long-term dependency, or limited work participation.

The estimated total is roughly $700 billion to over $1 trillion annually

Much of this money represents a safety net of last resort. It supports vulnerable people, low-income workers, children, and people with genuine barriers to employment. The concern is that portions of these systems may unintentionally encourage long-term dependency, weak workforce attachment, or permanent reliance instead of movement toward greater independence. Of course, there are also concerns about fraud.

How Many Working-Age Adults Are We Talking About?

The broadest group is working-age adults receiving means-tested support through Medicaid, SNAP, SSI, housing assistance, refundable tax credits, or related programs.

For Medicaid, one estimate from a 2025 White House policy document said there were 27.2 million able-bodied working-age adults aged 19–64 enrolled in Medicaid, including 16.8 million without children under age 19 at home. The same document estimated that 7.4 million childless, able-bodied working-age Medicaid adults worked less than 20 hours per week, and that 6.5 million of them did not work at all. It estimated federal taxpayers spent $56.1 billion in 2024 on Medicaid for childless, working-age, able-bodied adults working 20 hours per week or less.

Millions of additional working-age adults receive support through SNAP, disability programs, housing assistance, refundable tax credits, and related state-administered programs. Estimating the total number of distinct adults involved is difficult because many recipients participate in multiple programs simultaneously. A person receiving Medicaid may also receive SNAP, housing aid, or disability support.

Still, broad estimates suggest that tens of millions of working-age Americans participate in at least one major means-tested or income-support program in a given year.

Some examples:

• SNAP serves roughly 40–45 million people annually, including many children, elderly, disabled, and working adults.
• Social Security disability programs support roughly 8–9 million disabled beneficiaries.
• SSI supports millions more low-income disabled adults.
• Medicaid covers tens of millions of working-age adults.
• Housing assistance programs support several million households.
• Refundable tax credits such as the Earned Income Tax Credit and refundable Child Tax Credit reach tens of millions of households annually.

Not all of these recipients are detached from work. Many are employed, disabled, elderly, or temporarily struggling. But collectively, these systems support a very large population of working-age adults with varying levels of labor-force attachment and economic dependence.

Medicaid: The Largest Dependency-Related Program

Medicaid pays for medical care (remember it vs. Medicare with the mnemonic “aid for the poor/care for the elderly”). Many Medicaid recipients are children, disabled people, pregnant women, elderly people in nursing homes, or low-income workers. But Medicaid also now covers millions of low-income working-age adults. The Kaiser Family Foundation (KFF) reports that among Medicaid adults, 64% were working full or part time, and 92% were either working or not working because of barriers such as caregiving, illness, disability, or school attendance. The remaining 8% were retired, unable to find work, or not working for another reason.

These statistics shows that most adult Medicaid recipients are not simply refusing work. But it also means there is a smaller but still very large group of working-age adults who are not working and do not fall neatly into the clearest exemption categories.

SNAP and Food Assistance

SNAP is another major program. SNAP spending has recently been around $100 billion annually. SNAP already has work rules for many able-bodied adults without dependents. USDA rules generally require work, training, or related activity for many recipients, although exemptions and waivers have varied over time. One issue with SNAP is that food aid can become part of a long-term survival system for adults who remain only loosely attached to the workforce.

SNAP fraud is also part of the debate, perhaps the one most visible in the news. One of the most common forms is “trafficking,” where benefits are illegally exchanged for cash or where purchased goods are resold. Organized schemes involving retailers, stolen EBT credentials, or coordinated fraud rings periodically make headlines, including several recent multi-million-dollar prosecutions. According to the USDA, trafficking historically represented roughly 1% of total SNAP benefits, though rates vary over time and enforcement methods evolve. That may sound small percentage-wise, but in a program approaching $100 billion annually, even a 1% fraud rate can represent around $1 billion per year. Additional improper payments, eligibility errors, and stolen benefits add to the total cost.

The growth of electronic benefit systems has also created new forms of fraud, including card skimming and organized theft operations targeting EBT accounts. In recent years, federal and state authorities have prosecuted multiple large-scale SNAP fraud and benefit-theft schemes involving millions of dollars.

Still, it is important to keep perspective. Despite highly visible news coverage, most SNAP spending does not appear to be outright criminal fraud. The larger long-term policy question is less about dramatic fraud cases and more about whether the overall system encourages long-term dependency, weak workforce attachment, or low expectations for able-bodied adults who could potentially move toward greater self-sufficiency. Also, while we should eliminate every penny of fraud there is, the $1 billion estimated per year is but a drop in the bucket when we are trying to close a $2 trillion deficit.

Disability: The Hardest Gray Area

Disability programs are where the moral and fiscal questions become most difficult. In December 2024, Social Security reported 8.6 million disabled beneficiaries receiving Social Security disability benefits, including disabled workers, disabled adult children, and disabled widow(er)s. SSI is also significant. SSA’s 2024 SSI report says 53% of SSI recipients were aged 18 to 64, and 84% were eligible because of blindness or disability. It also reported that six out of ten SSI recipients under age 65 had a mental disorder and that 56% had no income other than SSI.

Some disability recipients clearly cannot work and require long-term support. Others fall into a much larger gray area involving chronic pain, depression, anxiety, obesity, addiction history, cognitive limitations, inconsistent work capacity, low education, or weak work history. These conditions can be real and genuinely limiting while still leaving significant debate about how much work a person could potentially perform under the right expectations, treatment, incentives, training, or workplace accommodations.

That gray area is where much of the controversy lies. Critics argue that modern disability systems increasingly treat partial limitation as permanent incapacity, especially for conditions that are subjective, difficult to verify precisely, or highly dependent on environment and personal functioning. Over time, the system can shift people from temporary hardship or marginal employability into permanent labor-force detachment.

Outright disability fraud certainly exists (see the chart coming below for a summary of estimated areas for elimination). Federal investigators regularly uncover cases involving falsified medical claims, hidden income, fake disabilities, or coordinated fraud rings involving doctors, lawyers, or claims processors. But most experts do not believe outright criminal fraud explains the majority of disability spending.

The larger concern is broader than simple fraud. Improper payment estimates for Social Security disability programs are generally much lower than many people assume. However, “improper payment” does not fully capture soft eligibility standards, inconsistent evaluations, legal incentives to maximize approvals, or systems that sometimes reward long-term non-work more than gradual reintegration into employment.

Some analysts argue that disability programs have partially evolved into a long-term support system for millions of economically marginal adults who may not be fully disabled in the traditional sense, but who struggle to compete consistently in the modern labor market.

Even relatively modest levels of questionable eligibility or unnecessary long-term dependency can involve enormous sums of money. When healthcare and related support programs are included, disability-related federal spending reaches hundreds of billions of dollars annually. As a result, even partial reforms like tighter eligibility reviews, stronger return-to-work incentives, reduced fraud, or improved treatment and rehabilitation could potentially save tens of billions of dollars per year over time.

Prime-Age Men and Labor-Force Detachment

Labor-force detachment is another large part of the issue. The Hamilton Project reported in 2025 that 11% of prime-age men were not participating in the labor force, and that disability was the largest factor in non-participation for prime-age men. BLS data also shows a large gap between people with and without work-limiting health conditions. In July 2024, only 27.1% of people ages 16 to 75 with a work-limiting health condition participated in the labor force, compared with 74.7% of people without such conditions.

How Much Money Could Realistically Be Saved?

This is where many discussions become unrealistic. There is no credible scenario where the government suddenly saves $1 trillion per year simply by “ending welfare dependency.” Much of the spending discussed above supports: genuinely disabled individuals, children, elderly people, low-income workers, or people facing real barriers.

Still, based on various sources in government, foundations, and think tanks, there are likely substantial savings available through: higher labor-force participation, lower fraud and improper payments, stronger work expectations, reduced long-term dependency, better disability reform, and better incentives.

Estimated Realistic Annual Savings

Estimated Realistic Total: Perhaps $150 billion to $500 billion annually over time. (One estimate for total fraud in the government, shared in a National Review article here, was as much as $1 trillion in all government programs, but that’s an outlier).

The high end is still only a portion of America’s roughly $2 trillion annual deficit. It would likely require years of reform, cultural change, stronger economic growth, better workforce participation, and political willingness to achieve that kind of savings. Even still, the more realistic lower end would make a meaningful dent in our spending and deficits while also potentially strengthening workforce participation and social stability, and maybe causing citizens to regain some faith and trust in government.

What Should We Do About It?

Public assistance should help people stabilize, work, recover, train, contribute, and become less dependent where possible. Of course, we should tolerate zero fraud, we need both parties to stop talking about fraud or blaming the other side and to do what it takes to eliminate it. Aside from the money being wasted, failure to achieve this goal will only increase our cynicism about the government. Here are some of the ideas that experts in this area say can be implemented:

First, benefits should be redesigned to reduce benefit cliffs. Too many people lose too much assistance when they earn slightly more income. That can make advancement feel irrational. Benefits should phase down gradually so work always pays.

Second, able-bodied adults without caregiving responsibilities should face clear expectations: work, train, study, volunteer, receive treatment, or participate in job placement.

Third, disability programs should allow and encourage partial work. Many people cannot work full time but can work part time. The system should make that easier instead of forcing people into an all-or-nothing choice between disability benefits and employment.

Fourth, anti-fraud and eligibility checks should be stronger, but not so bureaucratic that eligible workers lose benefits because of paperwork. Work requirements can fail when they mostly punish people who are already working but cannot navigate reporting systems.

Fifth, addiction and mental-health treatment need to be connected to benefits. If a person’s barrier to work is addiction, untreated mental illness, or severe dysfunction, simply mailing benefits indefinitely is not enough. Support should require a path toward recovery.

Sixth, states should be judged by outcomes, not just caseloads. A state should not be rewarded merely for enrolling more people or cutting more people off. It should be rewarded for increasing employment, earnings, health stability, family stability, and exits from long-term dependency.

Seventh, in all of our policies and political discourse we should be very clear that in a healthy society, if you can contribute, you should contribute. That is part of what it means to be a citizen.

America’s safety net does a lot of good. It helps children eat, gives medical care to low-income families, supports disabled people, and keeps many vulnerable Americans from falling into deeper crisis. But the system also supports a large number of working-age adults who are not fully incapable of work, yet remain detached from the labor force or stuck in long-term dependency. Also, any fraud is too much fraud. The cost of the savings opportunity likely approaches hundreds of billions of dollars per year across a broad network of programs. That is still only a portion of a $2 trillion annual deficit, but it makes a dent and also makes us a stronger nation.