Falsely registering someone as insured—reporting a person to Social Security while they do not actually work for the employer—constitutes “fake insurance” and should be avoided. When uncovered, this practice carries significant sanctions for both the employer and the falsely declared insured. Understanding the penalties and measures applied against fake insurance helps prevent future occurrences and clarifies the consequences for those involved.
What Is Fake Insurance?
Fake insurance refers to reporting a person to the Social Security Institution (SGK) under schemes such as 4A, 4B, or 4C when that person does not actually perform the declared work. The most common cases occur under 4A (SSK) coverage. Employers may register individuals to obtain social security benefits—such as pension payments, health services, disability child education allowances—or to meet minimum workforce requirements for construction projects and public tenders.
The categories of who is and who is not considered insured are clearly defined in Law No. 5510 on Social Insurances and General Health Insurance. Because 4C applies to civil servants, fake insurance is less likely in that group. Similarly, 4B coverage typically requires the individual’s own application, so fake registrations are less common. By contrast, fraudulent registrations are more frequently encountered under 4A, which arises from employment relationships.
Steps Taken to Reduce Fake Insurance
The SGK has implemented several measures to curb fake insurance. One major driver of fraudulent registrations has been people’s desire to access health services. Since the introduction of universal health insurance, however, everyone can obtain health services by paying premiums even without being registered under another SGK category. Voluntary insurance was also expanded to include general health coverage, granting voluntary contributors access to health benefits.
When an employer registers a workplace, the institution may order inspections by social security auditors to verify that the information in the workplace declaration matches reality. These checks help deter false reporting.
In cases where fake insurance was used to meet minimum worker counts on construction sites, the SGK’s reconciliation system now provides alternatives so employers no longer need to falsely declare non-working individuals as employed. These measures are expected to reduce instances of fake insurance.
Penalties for Fake Insurance
If fake insurance is detected, the SGK applies penalties. The service days recorded for the falsely declared periods are removed, and any payments or healthcare costs received from the start of the false registration until discovery are reclaimed from both the insured person and the employer with legal interest.
If the individual has become eligible for a pension through fake insurance, the pension is immediately cancelled and payments are suspended. The SGK will demand repayment of all pension payments already disbursed, with legal interest. Additionally, criminal complaints may be filed for submitting false documents and causing financial harm to the institution.
Sanctions for obtaining a pension through fake insurance apply not only to the falsely declared individual but also to the workplace that registered them. This issue is frequently observed among spouses: when one partner is incorrectly listed as an employee, administrative penalties may be imposed on both the employer and the falsely declared spouse. The same responsibilities and potential penalties may extend to other family members who were falsely registered.