Press release

Benefit fraudsters warned they face tougher penalties

Ministers will be able to fine benefit cheats up to £2,000, with a minimum penalty of £350 without having to take them to court.

From today, Ministers will be able to fine benefit cheats up to £2,000, with a minimum penalty of £350 without having to take them to court. This measure, part of the Welfare Reform Act, is expected to save the taxpayer an estimated £42 million over the next three years.

Low level fraudsters will now face these additional financial penalties alongside paying back any money they have stolen. Cautions will no longer be an option, meaning no fraudster escapes without punishment.

Welfare Reform Minister Lord Freud said:

We always push for the strongest possible punishment for benefit thieves who are stealing money from the people who need it the most. When it makes financial sense to do so, we will prosecute through the courts but where very little or no money has been stolen we will fine people as well as recover any overpayment, hitting fraudsters where it hurts the most.

We are getting tougher and no one will escape justice with a mere slap on the wrists.

Last year around 7,300 administrative penalties were issued to benefit fraudsters.

The tougher administrative penalties are the first of a range of new powers in the Welfare Reform Act designed to deter fraudsters. Other penalties coming into effect in the future to cut down on fraud and error include:

  • Extended loss of benefit for offences, which result in a conviction, of 13 weeks for a first offence, then 26 weeks for a second offence and 3 years for a third offence.
  • An immediate 3 year loss of benefit for serious or organised benefit or identity fraud.
  • A new £50 civil penalty in cases where claimants negligently give incorrect information on their claim or fail to report a change in circumstances which results in an overpayment.

Note to Editors:

  • Before today, fraudsters faced a maximum administrative penalty of £600 with a minimum penalty of just £15. Now the minimum penalty is £350 rising to 50% of the benefit overpayment, whichever is the greater, up to a maximum of £2000.

  • Fraud and Error in the Benefit System 2010/11 estimates are published here: http://statistics.dwp.gov.uk/asd/asd2/index.php?page=fraud_error

  • In February 2012, the DWP published an updated strategy as part of the Cabinet Office’s cross-Government Fraud, Error and Debt Taskforce. ‘Tackling fraud and error in the benefit and tax credits systems’ is available here: http://fed-conf.co.uk/documents/HMG%20Fraud%20and%20Error%20Report.pdf

Help us improve GOV.UK

Please don't include any personal or financial information, for example your National Insurance or credit card numbers.