Are they committing wel-fare fraud?

Usually you have to prove how much you pay in rent/utilities. They will have to produce a lease or a sub-lease. I think the boyfriend leasing out a room is ok. The parents will have to produce a receipt for the rent or a cancelled check or ask the boyfriend to write a letter. If he writes a letter or legal document and lies about the amount of money they pay him, he could be in trouble. Most likely the parents just won't get approved. As long as the boyfriend is collecting the $1100.00 then there is no fraud. I don't believe the boyfriend and girlfriend will be in any trouble as long as they are not applying for welfare. The parents are the ones who have something to lose. They have to re-qualify every few months (not sure how often) so they have to produce receipts, cancelled checks, etc.