Induced Deception? Ethical Dilemmas Surrounding Welfare Fraud and the ‘Benefit Cliff’ in Taiwan’s Residualist Welfare State

This article examines the ethical governance of welfare fraud in Taiwan’s residualist state. By analysing judicial rulings on individual and organisational misconduct, it argues that fraud often constitutes ‘induced deception’. Rigid structures, particularly the ‘benefit cliff’, create perverse incentives that penalise honesty, shifting moral responsibility from individuals to institutions. The study reveals an ‘ethical hierarchy’ where courts frame individuals through dependency and organisations through fiduciary duty. It advocates shifting from surveillance-heavy compliance to an ‘ethical governance’ framework that reduces structural induction and facilitates smoother benefit transitions to sustain social solidarity.