Research and analysis

Summary: Qualitative research into the behavioural impact of the penalties regime for benefit fraud and error

Published 16 December 2025

Authors  

Lucie Loridon, Research Executive at Verian 

Mary Suffield, Senior Director at Verian 

Milo Warby, Associate Director at Verian 

Overview 

This report outlines the findings from qualitative research exploring how DWP’s current penalties regime influences the thoughts and behaviours of people who commit welfare fraud and error.  

In-depth interviews were conducted with individuals who had received a benefit overpayment due to fraud or claimant error and subsequently received a penalty. The use of the term ‘penalty’ in this research was broad and reflected that the research aimed to capture a range of experiences. Participants could have received one of three penalties:  

• Civil Penalty for Error: A £50 civil penalty may be imposed following a benefit overpayment that was judged to have arisen due to claimant failure to disclose information, negligence or failure to disclose timely information to DWP without reasonable excuse and has been caused by claimant error. 

• Administrative Penalty (Ad Pen): An Ad Pen is a financial penalty offered by DWP as an alternative to prosecution where trained investigators believe there is sufficient evidence to offer a realistic prospect of conviction. A person has to accept the Ad Pen, if the Ad Pen is rejected, the Department refers the case to the prosecuting authorities for consideration for prosecution. Ad Pens are offered where the case is not so serious that the first option should be prosecution. 

• Prosecution: This is usually reserved for cases above the £5,000 overpayment threshold. Cases below this can also be considered for prosecution if there are aggravating factors present such as the use of false documents or identity, if they occupied a position of trust, or there is evidence of premeditated or organised fraud. Prosecution should also be sought if the offer of the Ad Pen is refused. Prosecution should normally be considered in the first instance for overpayments higher than £5,000 but each case should be judged on its own merits. The ‘prosecuted’ group sampled for this research was only drawn from individuals whose prosecution resulted in a conviction. 

The research questions for this project sat under three themes. This report is structured in line with these questions.  

• Current awareness and perceptions of penalties: The report covers specific behaviours and circumstances found to have led to receiving a penalty for fraud or error, including discussion of awareness, perceptions, capability and challenges with the system.   

• Impact of penalties for driving deterrence: The report covers the impact of penalties on participants, in terms of their finances and lives, and on their future behaviour.  

• Exploring what might change behaviour including preventing recidivism: The report covers opportunities for behaviour change, identified through research, to prevent fraud and error and reduce repeat occurrences.  

Please note that this report presents perceptions and experiences of people who received a penalty for fraud or error. This provides insight into how policies and processes are understood and felt by this group but is not corroborated with external data, detailed discussion of DWP policy and processes, or alternative perspectives. For readability, this summary does not explicitly reiterate throughout that findings are based on the perceptions of the claimants. 

Methodology 

Methodology and sample  

Verian conducted 48 in-depth interviews via telephone or Microsoft Teams with three separate groups between January and April 2025. Interviews lasted around 45 minutes. The three groups were individuals who had received a Civil Penalty, accepted an Administrative Penalty, or were prosecuted for benefit fraud and convicted. Secondary criteria were age, gender, and benefit type to ensure a range of experiences were heard. In-depth interviews allowed participants to discuss the complex, often sensitive stages of their experience, including personal circumstances and possible criminal behaviour. Participants were not financially incentivised or compensated for this research. 

Recruitment 

The sample for this project was supplied by DWP. Participants were contacted with an opt-in / opt-out letter from January 2025 onwards to give individuals the opportunity to express interest or decline contact via email or telephone. Those who did not opt-out were then contacted via telephone using a bespoke recruitment screener which allowed recruiters to address questions before scheduling interviews with a researcher.  

Limitations  

This research was qualitative. Therefore, while the findings explore the range of experiences and opinions of participants, the findings are not generalisable to the overall population of individuals who have received a penalty.  

In this research specifically, where no financial incentive was used, findings may overrepresent those who felt their case was less intentional and underrepresent those who admit to fraud. The study excludes views from those deterred before a penalty.  

The findings reflect participants’ own perspectives, shaped by memory, stigma, and possible misunderstandings of DWP processes. A set of factors are likely to have influenced these perspectives and the accuracy of the information shared. These include recall due to events described potentially occurring a number of years prior (including events preceding receiving a penalty), post-hoc rationalisation and stigma associated with admitting fraudulent intent, and errors in factual understanding about DWP policies and procedures described. Furthermore, this research is not intended to provide an objective account of why participants received a penalty or interactions with the penalties regime. Rather, the research provides the perspectives of people who have received penalties, as one source of insight about the penalties regime, and the findings should be considered in this light. 

This qualitative research is not designed or intended to establish the objective truth about the events leading up to or following a penalty, an event which was inherently adverse for these participants. The research instead provides insight based on a claimant perspective specifically. It would be expected that other perspectives on these events may support different interpretations.  

The findings throughout the report are based on the participant perceptions. For the purposes of readability, we have not consistently used explicit phrasing to highlight that these findings reflect participant perceptions when reporting. However, it should be borne in mind that the findings describe what participants perceived rather than being corroborated with external data, comparisons with DWP policy and processes, or alternative perspectives.

Main findings 

• Participants reported having low levels of awareness of the penalties regime before receiving a penalty.  

• There was a spectrum of perceived intention around benefit fraud and error: completely unintentional, mistaken, and those aware of their benefit fraud.  

• The research identified four aspects of participant perceptions and behaviour that were thought to explain why fraud or error occurred in these cases, leading to participants receiving a penalty. Firstly, there were participants that did not perceive their behaviour to be non-compliant with the rules for claiming benefits or perceived the level of non-compliance to be ‘minor’. Those found to have committed fraud did not believe that they fit their perceived criteria of what a fraudster was (and so, after receiving a penalty, felt unfairly treated). Secondly, there were participants who appeared to have limited capability to understand and follow the rules related to eligibility and reporting obligations, for instance due to cognitive challenges. Thirdly, participants expressed a lack of understanding that it was their responsibility for reporting a change of circumstances or possible overpayment. Finally, there were some participants that raised difficulties in identifying ways to report a change of circumstances or possible overpayment after suspecting that they needed to do so. 

• Participants described interconnected negative impacts from the penalty, including on their finances, their physical and mental wellbeing and social life and relationships. Participants who lost access to benefits described this aspect of the penalty as a significant source of their financial hardship. While penalties have a general punitive purpose, not all these specific negative impacts may be intended to result from the penalty. The type and degree of the impact varied by penalty type, from relatively less extreme impacts for Civil Penalties to more serious and long-lasting for those prosecuted or receiving an Administrative Penalty. 

• Receiving a penalty appeared to increase participant understanding of what fraud looked like and how to avoid this in the future, and increased reporting of changes of circumstances. However, for others, the desired behaviour change was unclear, and this led to other (sometimes unexpected) behaviour changes. These included disengagement from DWP or the benefit system or taking cash in hand.  

• Participants perceived that they could try to follow desired behaviours (reading the benefit declaration, applying this to their circumstances and reporting any changes promptly through the correct channels) and still receive an overpayment and penalty. Therefore, this research highlights the potential value in reviewing how clearly desired claimant behaviours are defined and communicated. 

• This research indicated that harsher penalties alone would not have effectively led to the desired behaviours among those interviewed. Participants felt that other options beyond penalties as deterrents could have helped in their cases. 

Current awareness and perceptions of penalties 

Participants’ knowledge of the DWP penalties regime was limited before receiving a penalty. Wider awareness of the penalties regime was low mainly because participants appeared unlikely to have closely read and digested their benefit declaration or applied it to their own circumstances. In these cases, limitations in capability, including challenges with cognition and financial literacy, were felt to be partly responsible for this lack of engagement.  

Some participants discussed how, before receiving a penalty, they had felt anxious about changes of circumstances which they suspected might lead to fraud if unreported. However, this did not appear to lead to specific changes in behaviour. For the most part, participants did not appear to be worried about getting “caught” or have expectations of how long it would take for their case to be detected. This was generally because they were either unaware or unsure whether their circumstances and behaviour were against the rules. This reflected a spectrum of intention around benefit fraud in which participants often did not perceive their action as deliberately leading to fraud. 

For some participants, limited understanding of the penalties regime and of specific penalties continued even after they had received a penalty. For example, some of those who received a Civil Penalty regarded this as a simple repayment or fixing of an issue rather than a penalty. However, these participants still discussed distressing experiences and attempting to change behaviour to avoid overpayments in the future.  

Those who accepted an Administrative Penalty appeared to recognise that they had a choice to decline it and go to court but often felt pressured by internal or external factors to accept it. There were two main reasons for this. Those with mental and physical health issues felt unable to go to court in fear that their health would worsen. Others felt scared into accepting the Administrative Penalty due to a belief, reportedly based on messages from participants’ legal advisors and DWP investigators, that going to court may lead to prison time.  

Implications: The benefit declaration appeared to be a key stage for awareness-raising where current engagement was low. Participants believed more could be done to encourage them to read and engage with the declaration and its implications. These requests focused on receiving more guidance around what they were agreeing to and having information presented in a format that was easier to read and understand.  

Approaches could be explored for ensuring that participants who are given the option to accept an Administrative Penalty receive a full and balanced view of what the consequences of a court hearing may be. For example, they could be informed about suspended sentences and community service rather than just hearing about going to prison. This would allow participants to make a more informed decision when accepting an Administrative Penalty.

Impact of penalties for driving deterrence and reducing recidivism 

This research indicated that, due to the limited levels of awareness and engagement, the threat of a penalty was a limited deterrent for these participants. Instead, a collective set of perceptions and contexts appeared to influence individuals in leading to fraud or error. These included not perceiving behaviour as negligence or fraud, limited recognition of what constituted fraud or error, a lack of understanding of individuals’ responsibility, and the perceived difficulty in reporting changes.  

By contrast, receiving a penalty subsequently increased these participants’ motivation to report going forward, therefore reducing their recidivism. Because penalties had a wide-ranging negative impact on individuals’ lives, participants sought to avoid them in the future.  

Due to issues with reporting changes of circumstance, this did not always lead to action that specifically prevented a future overpayment. For example, participants claiming UC flagged that they had been told they could only report a change of circumstances in the system once it had happened. Moreover, claimants from other benefit types attributed repeat penalties to a misunderstanding of responsibilities or difficulty engaging with the communication channels.  

Implications: The research highlighted perceived system-related issues that, if improved, could have helped remove barriers and encourage more disclosing behaviour among those interviewed.  

The findings indicate that penalties can reduce recidivism and change behaviour. For those interviewed, penalties would be even more effective at reducing recidivism when paired with measures to increase capacity and more clarity around channels for reporting changes of circumstances.  

Discussing potential new policy interventions 

This research did not test specific interventions with participants. Participants were asked about what changes, if any, would have prevented fraud or error in their case. Participants believed there was clear room for improvement of the penalties regime, and DWP’s approach and treatment of benefit claimants more generally. In line with this, while some participants highlighted specific actions they could have taken to avoid fraud or error, others were reluctant to say they would act differently based on their current knowledge and wanted to see changes in DWP practices.  

Some individuals believed that, as this was their first offence, this should be considered in the penalty and they should be treated more leniently. Prompted disclosure was also raised spontaneously by some of these participants, for example in the form of an ‘amnesty’ option on the basis of admission of potential fraud or error. This appealed to these participants because they often believed they had made genuine mistakes and should be rewarded for bringing this to DWP’s attention.  

Participants did not believe a more severe penalty (for example a higher financial penalty or loss of benefits) would have made a difference in their case. Receiving a penalty appeared to be sufficient motivation for these individuals to try to change their behaviour, even if some continued to struggle with reporting a change of circumstances. Participants’ low levels of engagement before receiving a penalty (for example, being unaware of what the potential penalties were or not thinking this would ever apply to their case) indicate that more extreme penalties would remain limited at deterring fraud. One solution to this could be connecting the threat of a specific penalty with individual circumstances, for example through the declaration and case studies.  

Implications: This research indicates that harsher penalties are likely to have greater impact on lives but not necessarily on deterring fraud more generally. This suggests that changes focused on encouraging disclosure would be more effective in preventing fraud for those interviewed by increasing awareness and removing stigma.