Press release

Government strengthens fight against £3.5bn benefit fraud and error

This news article was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

Latest figures show fraud and error in the benefit system stands at 2.1% of overall welfare expenditure.

Fraud and error in the benefit system stands at 2.1% of overall welfare expenditure, today’s (16 January 2014) figures show, with new initiatives due for 2014 as part of the long-term plan to reduce fraud and error.

Data released today for 2012/13, following preliminary estimates published in May 2013, reveal that:

  • benefit fraud stands at £1.2bn or 0.7% of expenditure
  • claimant error overpayments were at 1.0% of expenditure or £1.6bn
  • official error overpayments remained at their lowest rate of 0.5% of expenditure or £0.8bn

In 2012/13, the Department for Work and Pensions and local authorities recovered around £900million that had been overpaid due to benefit fraud and error, an increase of £60million over the last year.

New measures to counter fraud in the coming year include linking benefits with PAYE tax systems to almost immediately highlight if a person is working while claiming and creating stronger fraud investigation teams.

Analysis of the benefits reveals fraud and error for:

  • Jobseeker’s Allowance dropped to 4.1% (£210m) of benefit expenditure – claimant error has dropped to 0.5% (£30m) and official error was at its lowest recorded level of 0.8% (£40m).
  • Income Support has dropped from 4.4% (£310m) in 2011/12 to its lowest recorded level of 4.3% (£230m) in 2012/13
  • Pension Credit was at 6.4% (£490m) of benefit expenditure – official error in Pension Credit reduced slightly whilst fraud and claimant error increased
  • Housing Benefit was up to 5.1% (£1.2bn) – levels of fraud and official error have dropped but claimant error has risen to its highest recorded level at 3.3% or £780m

Minister for Welfare Reform, Lord Freud, said:

We are fixing the welfare system to stop errors and ensuring investigators have the resources to catch cheats.

The level of fraud and error in the benefits system is lower than 3 years ago, and only a small minority commit fraud, but we are determined to continue the battle. This year we expect a record number of prosecutions.

The public play a vital role in our efforts to crack down on benefit fraud and error. We urge anyone who suspects someone of cheating the system to report this to the benefit fraud hotline

If your circumstances have changed, make sure that you tell the authorities before any overpayments get out of hand or to make sure you are receiving your full entitlement.

To further counter losses of overpayments in benefits, in the last year we have:

  • started the national rollout of Universal Credit, which is expected to reduce fraud by £1billion in 5 years when it is fully in place across the country
  • 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
  • introduced new tougher measures to deter fraudsters including penalties of up to £2,000 without being taken to court
  • reduced official error in the benefits system for Jobseeker’s Allowance, Housing Benefit, Income Support and Pension Credit overpayments

In our continued fight against benefit fraud and error, we are:

  • launching a new fraud and error advertising campaign urging people to report suspected benefit fraud or changes to their circumstances that may affect their claim
  • starting to link benefits with PAYE tax systems using the Real Time Information system to enable benefit teams to see almost immediately if a claimant is lying about working
  • introducing a single Fraud and Error Service from April 2014, which will bring together DWP’s existing fraud investigation and customer error teams into a stronger service
  • 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

DWP is increasing the number of investigations and cases referred to the Crown Prosecution Service for prosecution. New powers also allow financial penalties up to a maximum of £2,000 and a loss of benefits as an alternative to prosecution.

Anyone with information covering suspected benefit fraud should call the National Benefit Fraud Hotline on – 0800 854 440.

More information

See the full statistical release which covers fraud and error in the benefit system in 2012/13

Estimates of Fraud and Error by individual benefits in 2012/13:

  • 4.3%, or £230m, of Income Support expenditure (£5.5bn) was overpaid
  • 4.1%, or £210m, of Jobseeker’s Allowance expenditure (£5.2bn) was overpaid
  • 6.4%, or £490m, of Pension Credit expenditure (£7.6bn) was overpaid
  • 5.1%, or £1,220m, of Housing Benefit expenditure (£23.7bn) was overpaid
  • 1.3%, or £70m, of Income Support expenditure (£5.5bn) was underpaid
  • 0.4%, or £20m, of Jobseeker’s Allowance expenditure (£5.2bn) was underpaid
  • 2.3%, or £180m, of Pension Credit expenditure (£7.6bn) was underpaid
  • 1.6%, or £380m, of Housing Benefit expenditure (£23.7bn) was underpaid.

In 2012/13 DWP recoveries (excluding Housing Benefit) were estimated to be in the region of £390m. Housing Benefit recoveries by local authorities are estimated to be in the region of £510m for 2012/13, according to the latest available data

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