Changes in the fraud and error in the benefit system: financial year 2023 to 2024 estimates: statistical notice update
Statistical notice about changes to the way DWP will publish statistics about benefit underpayments and how it will classify cases which fail to provide evidence.
Applies to England, Scotland and Wales
Introduction
This statistical notice is about changes to the ‘Fraud and error in the benefit system’ publication.
The changes in this statistical note will take effect for the Financial Year Ending (FYE) 2024 publication, due for publication on 16 May 2024.
The changes are:
- Removing claimant error underpayments and reclassifying and reporting the information in a new ‘Unfulfilled eligibility in the benefit system’ publication. This new publication will be published on the same day as the ‘Fraud and error in the benefit system’ publication.
- Further refining our classification of cases which fail to provide evidence using additional data. This follows initial changes made to the classification of these cases last year.
We are making these changes as part of our continuous review of the methodologies used to produce our statistics.
Revised figures for FYE 2023 will also be published within both the ‘Fraud and error in the benefit system: FYE 2024’ estimates and the ‘Unfulfilled eligibility in the benefit system: FYE 2024’ estimates. This will allow a like-for-like comparison with the newly published figures for FYE 2024.
Due to the amount of resource required to apply the methodology changes to all historic data, we are unable to provide an updated back series prior to FYE 2023.
Further detail on these changes will be presented in the background information and methodology notes that will accompany both the ‘Fraud and error in the benefit system: FYE 2024’ estimates and the ‘Unfulfilled eligibility in the benefit system: FYE 2024’ estimates.
If you have any queries on these changes, please send them to: enquiries.fema@dwp.gov.uk
Background
The Department for Work and Pensions (DWP) uses a complex methodology to measure the levels of fraud and error in the benefit system. Read more information on the methodology used.
Changes
Removing claimant error underpayments and reclassifying and reporting the information in a new publication
We carried out a planned review of the ‘Fraud and error in the benefit system’ statistics that we referred to in our publication strategy when we published our FYE 2023 statistics. This review determined that the estimates previously published as claimant error underpayments do not fit the legal definition of underpayments. In benefit legislation, claimants are not eligible for increases in their benefit until they accurately report changes in their circumstances to the department.
Due to the outcome of this review, estimates that were previously reported as claimant error underpayments will be removed from the ‘Fraud and error in the benefit system’ statistics publication from FYE 2024 onwards. These estimates will be reclassified as unfulfilled eligibility, and this information will be reported separately in a new ‘Unfulfilled eligibility in the benefit system’ publication. This new publication will be published on the same day as the ‘Fraud and error in the benefit system’ publication.
Unfulfilled eligibility refers to claimants who are already in receipt of a certain benefit but may not be getting the full award they could be eligible for. ‘Unfulfilled eligibility in the benefit system’ will estimate the percentage of benefit expenditure that could have been paid to people with unfulfilled eligibility, if they had provided the correct information. The proportion of benefit claims with unfulfilled eligibility will also be estimated.
These new estimates will be calculated using very similar methodology to that used previously for claimant error underpayments, with one difference relating to the netting adjustment that has a minimal impact on the estimates. To allow for a direct comparison, we will be revising the FYE 2023 figures for all benefits in both publications to account for this difference.
When these estimates were classified as claimant error underpayments, a netting adjustment was made to the data where overpayments and underpayments on the same claim were netted off each other, to calculate the net effect of each claim. Following the reclassification, fraud and error and unfulfilled eligibility are defined and published separately, so there is no longer a netting adjustment that can be made to unfulfilled eligibility claims. This will lead to an increase in the unfulfilled eligibility estimates, when compared to claimant error underpayment estimates. It will also lead to an increase in the fraud and error overpayment estimates since unfulfilled eligibility cannot be netted off from overpayments. Official error underpayments will still be published within the ‘Fraud and error in the benefit system’ publication, so they will continue to be netted off overpayments on the same claim.
Further refining our classification of cases which fail to provide evidence
This relates to claims where the claimant has participated in the benefit review but has then failed to send in the requested evidence and subsequently had their claim to benefit terminated for failing to comply. These claims are categorised as fraud due to ‘failure to provide evidence’.
There is already an adjustment made to these claims where we look 4 months after their claim was terminated to see if we can find any evidence that would allow us to reclassify the fraud to a known error reason. This year we expanded this adjustment to see if we can find any evidence that would allow us to remove the fraud entirely on some of these claims (for example if we can see evidence of earnings coming through RTI the month after the benefit was terminated, which would have nulled the claim).
This change has the potential to impact all benefits. To allow for a direct comparison, we will be revising the FYE 2023 figures. However, in FYE 2024 and the revised FYE 2023 figures, only Universal Credit will be affected.