Guidance

Loss of benefit as a penalty for benefit fraud

Published 27 March 2013

The Welfare Reform Act 2012 introduced tougher penalties for people who commit benefit fraud.

Benefits can be reduced or stopped if a claimant, their partner or a family member is convicted of a benefit fraud offence or accepts an administrative penalty for such an offence. An administrative penalty is a financial penalty offered by DWP as an alternative to prosecution.

1. What has changed?

The following measures apply to benefit fraud offences committed wholly on or after 1 April 2013.

The duration of the loss of benefit penalty for a benefit fraud offence that results in conviction is 13 weeks (up from 4 weeks).

If a second benefit fraud offence is committed within 5 years (a ‘linking’ offence), and the second offence results in a conviction, the loss of benefit penalty will last for 26 weeks.

If a third benefit fraud offence is committed within 5 years of the second (and within10 years of the first), and the third offence results in a conviction, the loss of benefit penalty will last for 3 years.

If an offence involves serious organised fraud or identity fraud it will result in an immediate loss of benefit penalty for 3 years.

If an offence results in an administrative penalty or a caution, the loss of benefit penalty will last for 4 weeks (no change).

2. Which benefits can be reduced or stopped?

The following benefits can be reduced or stopped as a penalty for benefit fraud:

  • Carer’s Allowance
  • Employment and Support Allowance
  • Incapacity Benefit
  • Income Support
  • Industrial Death Benefit
  • Industrial Injuries Disablement Benefit
  • Industrial Injuries Reduced Earnings Allowance
  • Industrial Injuries Retirement Allowance
  • Industrial Injuries Unemployability Supplement
  • Jobseeker’s Allowance
  • Severe Disablement Allowance
  • Housing Benefit
  • Pension Credit
  • Universal Credit
  • War Disablement Pension
  • War Widow’s Pension
  • War Pension Unemployability Supplement
  • War Pension Allowance for Lower Standard of Occupation
  • Widowed Mother’s or Widowed Parent’s Allowance
  • Widow’s Pension or Bereavement Allowance
  • Working Tax Credit

The following benefits cannot be reduced or stopped as a penalty themselves. But if they are involved in benefit fraud, any benefit listed above may be reduced or stopped as a penalty instead.

  • Attendance Allowance
  • Bereavement Payment
  • Child Benefit
  • Child Tax Credit
  • Christmas Bonus
  • Constant Attendance Allowance
  • Council Tax Benefit
  • Disability Living Allowance
  • Graduated Retirement Benefit
  • Guardian’s Allowance
  • Industrial Injuries Constant Attendance Allowance (if a Disablement Pension is payable)
  • Industrial Injuries Exceptionally Severe Disablement Allowance (if a Disablement Pension is payable)
  • Personal Independence Payment
  • State Pension
  • Social Fund payments
  • War Pension Constant Attendance Allowance
  • War Pension Exceptionally Severe Disablement Allowance
  • War Pension Mobility Supplement

Certain benefits involved in a fraud offence cannot be reduced or stopped as a penalty, or result in a penalty that reduces or stops another benefit. These benefits are:

  • Diffuse Mesothelioma Scheme (2008)
  • Health in Pregnancy Grant
  • Maternity Allowance
  • Pneumoconiosis (Workers’ Compensation) 1979
  • Statutory Adoption Pay
  • Statutory Maternity Pay
  • Statutory Paternity Pay
  • Statutory Sick Pay

3. Background

For benefit fraud wholly committed on or after 1 April 2002, the rules allowed for the removal or reduction of benefit for 13 weeks if a claimant, their partner or a family member had been convicted of a second benefit fraud offence.

From 1 April 2010, these rules were strengthened to enable a reduction or removal of benefit for 4 weeks in certain cases of fraud by a claimant, their partner or a family member. The new rules applied if:

  • they had been convicted, or had accepted a caution or an administrative penalty, for a first (or non-linking) benefit fraud offence, and
  • the fraud was committed wholly on or after 1 April 2010