Guidance

Loss of benefit as a penalty for benefit fraud

Updated 15 April 2026

Applies to England, Scotland and Wales

© Crown copyright 2026

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This publication is available at https://www.gov.uk/government/publications/loss-of-benefit-as-a-penalty-for-benefit-fraud/loss-of-benefit-as-a-penalty-for-benefit-fraud

From April 1 2026, the Public Authorities (Fraud, Error and Recovery) (PAFER) Bill 2025 has changed how Loss of Benefit is applied in certain circumstances.

Background

A loss of benefit penalty can lead to certain welfare benefits being reduced or stopped for up to 3 years in certain fraud cases that the Department for Work and Pensions (DWP) investigates.

The loss of benefit penalty was first introduced in the 2001 Social Security Fraud Act and has been updated a number of times since then.

Most recently, the 2025 PAFER Act removed the 4 week loss of benefit penalty which was applied automatically when a claimant accepted an administrative penalty following a full criminal investigation.

The administrative penalty will continue to be offered in relevant cases as an alternative to DWP seeking prosecution and can only be offered where there is a reasonable prospect of securing a conviction in the courts.

This change now means that the loss of benefit penalty will almost exclusively be applied only after a conviction has been issued by the courts for benefit fraud.

What has changed – April 2026

From April 1 2026, the 4 week loss of benefit will not apply where an administrative penalty is accepted.

When does the measure apply

The following measures apply to benefit fraud offences:

  • the duration of the loss of benefit penalty for a benefit fraud offence that results in conviction is 13 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 within 10 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.

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
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