Press release

Fraud and error: Jobseeker’s Allowance and Income Support overpayments at lowest levels ever

Jobseeker’s Allowance and Income Support fraud and error overpayments are at their lowest recorded levels.

From:
Department for Work and Pensions and The Rt Hon Lord Freud
Published
15 May 2014
This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

Jobseeker’s Allowance and Income Support fraud and error overpayments are at their lowest recorded levels, having fallen by £130 million in a year.

New figures show fraud and error in the benefits system stands at £3.3 billion or 2% of overall welfare expenditure.

Data released today with preliminary estimates for 2013/14 reveal that:

  • benefit fraud is at £1.1 billion or 0.7% of welfare expenditure
  • claimant error overpayments have fallen to 0.9% or £1.5 billion of spending
  • official error overpayments have dropped to their lowest rate of 0.4% of benefit expenditure or £0.7 billion

In 2013/14, the Department for Work and Pensions (DWP) and local authorities recovered around £940 million that had been overpaid due to benefit fraud and error across Great Britain, an increase of £100 million over the last 2 years.

New rules were announced last month to further deter claimants from committing benefit fraud and make sure stolen money is returned, building on measures already in place such as creating stronger fraud teams.

Further analysis of individual benefits reveals fraud and error for:

  • Income support dropped by £80 million to its lowest recorded level of 4% (£150 million) of benefit expenditure – both fraud and official error have reduced
  • Jobseeker’s Allowance has also fallen to its lowest ever level – from 4.1% (£210 million) in 2012 to 2013 to 3.7% (£160 million) of expenditure in 2013 to 2014 – with fraud and claimant error reducing
  • Pension Credit decreased to 5.7% (£410 million) of benefit expenditure in 2013 to 2014, from 6.4% (£490 million) the year before – fraud, claimant error and official error have fallen
  • Employment and Support Allowance is at 3.4% (£360 million) – this is the first time fraud and error has been reported
  • Housing Benefit – which is administered by local authorities – is up to 5.8% (£1,380 million)

Minister for Welfare Reform, Lord Freud, said:

It is encouraging to see that the level of fraud and error is now lower than before the start of the Parliament and we are recovering more money than ever.

Benefit fraud is completely unacceptable but we know there is more to do and that is why we are toughening the rules to crack down on fraudsters as part of the government’s long-term economic plan.

We are striving to return fairness to the system and make sure money goes to those who need it – and the public can help us do this by informing the authorities of anyone they suspect of defrauding the system.

To further counter losses of overpayments in benefits, we are:

  • introducing tough new rules so that 40% of individuals’ benefits may be taken to repay stolen cash, on top of any fine or custodial sentence handed out by the courts
  • increasing penalties that someone committing fraud can receive from £2,000 to £5,000, without taking them to court
  • using bailiffs to confiscate high-value possessions from convicted benefit fraudsters
  • continuing to roll out Universal Credit to more sites from June, which is expected to reduce fraud by £1 billion in 5 years when it is fully in place across the country
  • checking Jobseeker’s Allowance claims against PAYE reported in real time to highlight and catch claimants that are lying about working
  • expanding the targeted fraud error communications and advertising campaign to more areas in the country, urging people to report changes to their circumstances that may affect their claim or suspected benefit fraud
  • introducing single fraud investigations from this summer, so that investigations into Tax Credits, Housing Benefit and other DWP benefits can be carried out by a single investigator which will improve efficiency and fairness

In the continued fight against benefit fraud and error, we have already:

  • made greater use of Proceeds of Crime Act powers to take fraudsters back to court to confiscate assets, force them to repay stolen benefits or face prison
  • created a new Fraud and Error Service, which will bring together DWP’s existing fraud investigation and customer error teams into a stronger service
  • 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
  • made sure anyone found guilty of serious organised benefit fraud or identity fraud faces an immediate 3 year loss of benefits
  • introduced a £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
  • reduced official error in the benefits system to its lowest level ever – declining for Jobseeker’s Allowance, Income Support, Pension Credit and Employment and Support Allowance

DWP is also increasing the number of investigations and cases referred to the Crown Prosecution Service and Procurator Fiscal for prosecution.

Suspect benefit fraud? Call the National Benefit Fraud Hotline on 0800 854 440

More about the fraud and error in the benefit system statistical release

Read the full statistical release which covers fraud and error in the benefit system in 2013/14.

In 2013 to 2014 DWP recoveries (excluding Housing Benefit) were estimated to be in the region of £419 million. Housing Benefit recoveries by local authorities are estimated to be in the region of £524 million for 2013 to 2014, according to the latest available data.

Key findings for the individual benefits that are measured on a continuous basis are that:

  • 4.0%, or £150 million, of Income Support expenditure (£3.7 billion) was overpaid
  • 3.7%, or £160 million, of Jobseeker’s Allowance expenditure (£4.4 billion) was overpaid
  • 3.4%, or £360 million of Employment and Support Allowance expenditure (£10.5 billion) was overpaid
  • 5.7%, or £410 million, of Pension Credit expenditure (£7.2 billion) was overpaid
  • 5.8%, or £1,380 million, of Housing Benefit expenditure (£23.9 billion) was overpaid

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Published 15 May 2014

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