The Mass Middle Class Benefit Fraud That Could Soon Cost Us All A Fortune

benefit-cheatsHMRC have reported that up to 200,000 high earning scroungers could face fines for failing to register Child Benefit payments with the tax office.

The cut to Child Benefit for higher earners was one of the first welfare cuts announced by George Osborne, although it has been one of the last to be implemented.  Osborne demanded that families with an earner over £50,000 a year should have Child Benefits reduced and those earning over £60,000 should be stripped of the benefit completely.

In typically bungled fashion the implementation of this cut has turned out to be a bureaucratic shambles.  As well as penalising parents who choose to stay at home with children – dual income families could earn a combined wage of just up to £100k a year and not be affected by the cut – the DWP, who administer Child Benefit claims, have no record of how much Child Benefit claimants earn.

This means that these families will still receive the weekly payment, but will now have to register with the self-assessment system to declare the cash to HMRC who will then take the money away from them in their tax bill.  Unfortunately HMRC do not necessarily have details of whether tax payers have children, which means if people don’t register then they are unlikely to be discovered.

This is why HMRC chief executive Lin Homer said to BBC Radio 5 Live “We think there is about 200,000 people who need to get off their backsides and do something.”

This is the number of people estimated to have failed to register to pay back Child Benefits on Friday (3rd October), just 24 hour before the deadline.

In truth the situation could be far worse than the tax office is admitting.  Those on over £60 grand a year can simply opt out of Child Benefits, as they stand to lose the lot anyway.  There has been no estimate so far from HMRC on how many people in this group have failed to do so.  Most likely because HMRC don’t know.

Yet this group of benefit fraudsters needn’t worry as they can expect to be treated with kid gloves by the authorities.  Whilst there are penalties for those who are caught still claiming when they are no longer entitled, HMRC say that those who don’t bother to register until long after the deadline will probably not be fined.  They are unlikely to face ten year prison sentences, or be named and shamed on the DWP website.  There have been no posters placed on bus shelters in Chipping Norton encouraging millionaire residents to grass up their neighbours.

If the 200,000 people who have not yet registered fail to do so, then assuming they have on average 2 children, this mass scale benefit fraud could cost over a third of a billion pounds a year.  Astonishingly this is more than is lost due to fraud in the main out of work benefits, and around the total amount lost to fraud in the Housing Benefit system.  And it could be the tip of the iceberg.

It says everything about the character of the ‘aspirational’ middle classes that along with the rich they may soon become the largest group of benefit fraudsters.  Unlike those on out of work benefits, who may do a few hours work and not declare it for a similar sum to child benefits, they don’t need the money.  They just want it. And having lots of money, no matter where it comes from, is increasingly seen as the highest form of moral attainment.  Which is why there is one set of rules for the rich, and another set of quite different and draconian laws for the poor.

Follow me on twitter @johnnyvoid

54 responses to “The Mass Middle Class Benefit Fraud That Could Soon Cost Us All A Fortune

  1. Society will soon reflect these divisions more visabley with 1st, 2nd, and 3rd class options on buses and trains.
    Housing will be the same. In fact I see a future where people are boarding ships looking for ‘new worlds’ and escaping persecution.
    Class isimportant to Britian! It determins how often you can eat.

    • The old class system is surely long gone. Anyone who describes themselves as ‘middle class’ is an arse, claiming some sort of moral superiority based on circumstance in an attempt at social climbing.

      As for going to new worlds, that has real potential now. China and India are top choices for anyone with skills to offer.

  2. Off topic but bay be of interest to many here.

    Esther McVey is the new Employment Minister. There’s also a new face in the DWP, Mike Penning, former Northern Ireland Minister is now Minister of State for Work and Pensions.

    More on the reshuffle here:

    http://www.bbc.co.uk/news/uk-politics-24427138

  3. Esther McVey having made such a success as disability minister has just been given the job of employment minister!
    Great days lay ahead eh?

    • something survived...

      Well there are still plenty of lamp posts to go around. She’s a deadly bitch.

    • Another Fine Mess

      Let’s call her the unemployment minister.

    • Another Fine Mess

      I’m surprise hulk hoban has been sacked. He’d done such a good job of explaining how the Waste Programme is solving the UK’s unemployment problem, and how his ‘hit squads’ would manage to squeeze 30 unemployed into a single vacancy.

      • JSA/ESA10JP 04/13

        ‘hit squads’ have got fuck all to do with finding jobseekers are employment… ‘hit squads’ exist to sanction jobseekers benefit…

    • wherever there is cruelty required you will find Mc Vey.

  4. The only people who matter in this Tory country are rich,first there were tax cuts and now no persecution of the well off regarding benefits.
    Now the poor and disabled are a different matter,as we all know.

  5. Rather than couching this in class-war terms, it would have been more useful to simply write about how this government is creating fraud and promoting child poverty by making Child Benefit means-tested and more complex to get. It’s not at all about saving money, or making sure that only those who ‘really’ need CB get it. This government is determined to slice and dice people in every possible way. I see meanstesting as being brought in as preparation for eliminating it for most parents, not just those earning more than £60k. Pretty soon I expect they’ll be lowering the income threshold so that hardly anyone will qualify for it.
    The whole point of CB being non-meanstested in the first place was to a) ensure that all who do really need it get it; and b) just because a mother at home is married/living with a highly paid man (or the other way around, but rarer) doesn’t mean she’s actually seeing much, or any, of his money.
    I know a pensioner who raised three children in the 60s on the precursor of CB only (plus eventually a part-time job when the kids went to school) for precisely this reason – her husband earned a good wage, but refused to give any of it to her, even to help feed the kids. And according to CPAG this is not that uncommon. I’ve been appalled at the total lack of protest about CB meanstesting from feminists who should know better.
    While what you say is true, that those on good incomes who commit CB ‘fraud’ will certainly not face the kind of draconian penalties faced by people on other benefits – you’ve completely missed the egalitarian spirit of CB, which is what this government is really out to destroy.

    • I agree, I even wrote a paragraph on it for this post, but it seems to have disappeared. But yes this change was as much about eroding the principle of a universal welfare state as much as it was about saving money.

    • The government may lower the threshold of eligibility so that hardly anyone will qualify for CB.On the other hand the decades long failure to match inflation may just erode Child Benefit out of existence.

      Good point about CB and the carer parents, mostly women, who do not receive any money from their partners. This is continually overlooked today. When the payment via giro books was introduced part of the argument in favour of that change was the protection of women and children in the situation you describe.

      • And that specific benefit (family allowance – later Child Benefit) brought in as a universal benefit to ensure 100% take up, & mitigate against the levels of stigma that were (then) considered more than likely to anyone being seen to need to claim it, if means tested. To the extent that in some cases it could even prevent the money from reaching its intended recipients . (People were still cleaning/whitening their front doorsteps; appearances were everything – and everyone knew everyone else(s) business). So it was payable to the mothers of children – presupposing that they would, in the majority of cases, be the person most likely to spend it on meeting the child/children’s essential needs – & those basic needs could potentially be met – even in households with a less-than-adequate basic income. With some other attempts to ‘redress the balance’/introduce greater equality for children, eg. free school meals, the argument has also been in favour of not publicising this through making a distinction (eg. a separate queue for ‘free school meals’ with a sign above spelling it out in capitals). The idea that the attempt to ‘assist’ could simultaneously ‘make things worse’ for the recipients (due to stigma/risk of becoming ostracised) has long been around. Things have moved on – but not always ‘in a good way’ & the process of administering benefits is now so changed that no-one now has to stand in a post office queue, family allowance book in hand. They might find themselves having to run the gauntlet of DWP ‘assistance’ with all the conditionality/attending in person and form filling/updating of circumstances involved instead though, & some might not manage to get that far/the original intention could be lost.

        The government have reintroduced means-testing for this vitally important (but agreed, already being eroded) benefit alongside their other ‘great’ (retrogressive) intention to pay all of a household’s money (in a joint UC claim) into one designated person’s bank account. As if the concept of violence/coercion within a marriage/partnership where one or both partners has children is no longer one worth them giving any consideration to. It will be easier for them to administer it this way & so they will.

    • What egalitarian spirit, why should as Kittykat pointed out , the rich get benefits from the state at all?
      If women are living with partners who earn good wages but don’t tip up ( and I was one also but worked full time and had no children then), then they should leave, they are not doing their children any favours by staying in a selfish marriage.

      • why should… the rich get benefits from the state at all?

        The problem with means testing is increased administration costs, data acquisition and processing times. Overall it’s probably cheaper and more efficient to just let universal benefits stay universal and not bugger about trying to stop what the rich regard as pocket change from going to them.

    • Universal benefits also have another huge advantage. Whilst there will always be those who will begrudge the giving of money to anyone perceived not to be deserving, (either earning too much, or conversley not earning enough, as in the case of JSA claimants and others disadvantaged in society) universal benefits are cheap to adminster. The whole thing of making savings is a red herring, and I am old enough to remememeber Barbara Castle, (I think it was) being interviewed on TV in the late 70s about the universal nature of what was then called Family Allowance – her reply was that it was a benefit expressly aimed at women, (for the reasons outlined in other posts) and was universal in nature because that was the most cost effective way of implementation – no hordes of bureaucrats neccesary to administer a means test.

      Universal benefits also work towards another beneficial socual end, the slow abolition of the class system – once you manage to get a one universal benefit established in principle, it then becomes a little easier to make a case for other universal benefits, such as a citizen’s income. I know there are many who would benefit from that who would question whether that can be afforded by our society that is, allegedly, skint. But that is a lie, and a big one, as many here already know. The Tories and the political class in general want us to believe that a decent society where no-one is left behind is unaffordable, but the truth is that there is a huge amount of money floating about, more than there ever has been before in human history – it’s just in the wrong places. So what if the rich have to downsize to a detached semi, or have to sell off their land to pay death duties, they will still not be destitute, and would it really be that tough to have to shop in Waitrose rather than Fortnum & Mason’s?

      • The other one recently ‘under threat’ of removal or reverting to being means tested, is free bus travel for the over (whatever the age is – has it been shifted back to 80 yet?). “Why should people like Tony Benn” etc. get this? ‘Universal’ principle is well worth (trying to) hang on to – overall, the ‘perk’ is going to be/is used (& most valued) by people who otherwise wouldn’t be able to keep their independence/go out & about to see people etc. The other money spent on allowing it for anyone who wishes to take it up & where it can be argued it’s ‘not essential’ can be written off ‘for the greater good’ (& admin costs saved). Once people have to prove/detail their income there will always be those too unassuming, too proud/believing themselves ‘undeserving’ (or what-have-you) who will opt (themselves) out of the benefit Cue a study being done which shows that the demand isn’t as high as first imagined & that either the eligibility criteria should be changed (made more stringent) or the benefit shouldn’t be ‘as of right’. Cut its removal (first from one ‘higher eligibility’ group, then from everyone else).

        It does seem (at first glance) more difficult to argue the same for Child Benefit, as it’s easy to imagine an affluent parent(s) putting the money away into a high-interest account over the years – & then having either a world cruise or (insert own imagined use of thousands of pounds). But, as has been said, circumstances can change (for everyone) & the money is meant as a safety net so that whatever else may change, there is £x/month for each child in every family. As things stand.

        (I’d like to see the need for a minimum disappear & be replaced with a maximum income – & for someone to get the the job of collecting all of the ‘extraneous’ money & redistributing it to where it would be properly appreciated).

  6. Anyone earning 50K per year doesn’t need CB anyhow.To even claim is just pure greed & selfishness.Perhaps these lofty middle class snobs should practice what they’re so fond of preaching to those less fortunate & I quote ” if you can’t afford them, don’t have them”

    • what excellent points sn, gf, and kc58 make, coz i have written this, before i read your posts i’ll post it any way, the principle of this debate, is the shambolic double standards, as currently being witnessed by the attempts of the administrative implementation of osborne’s poorly thought out stirring policies. they simply do not make any sense, who is poor and in need, primarily those on jsa and e and sa, the unemployed/underemployed/underpayed, the sick and disabled…we are currently under relentless and viscous attack..arbitrary delineation of goose and gander serves no one, except to expose the sore thumb of brutal attacks on one group of people as opposed to another..we all need vitals, all who have as their only income, entitlement benefits, are poor..this issue needs to be carefully untangled, as it strikes at the very heart of all that is wrong with capitalism…and why welfare reform is travelling in precisely the wrong direction, and the govts that weren’t elected’s attempts to revitalise capitalism and/or shift it’s direction, to exclude the aforesaid poor from the debate…for me there is only one universal benefit that needs to be paid and that is a decent citizens income/wage, which by it’s very nature is capital/resource redistributive, obviously millions more eco-homes need to be built, the biggest cost is that of putting roof over head, and that for me is where egalitarian principles begin..housing, food, getting about, learning, communications, health care, and warmth…that would universally benefit for all…

    • If there were a redistribution of wealth – brought about in whatever way/s, there would be no further need for incomes topped-up to (today, not even close to) a ‘decent’ or a liveable income. Top-ups to make up for shortfalls in income, somewhere along the line became about the best most people thought they could expect – and, to whatever extent – ‘normal’. Until more recently when the principle of a right to ‘assistance’/benefits in kind (or in cash) has been altered/reworked, at speed. In a very few years, debates about benefits/who should get them/how they should be apportioned could (are already starting to seem almost to) be obsolete.

      “[Another of Peter Townsend's] … overriding concern[s] through the 1970s was to develop a poverty line rooted in such rigorous social science that it would be impossible to dispute, although, by a cruel quirk of fate, the work culminated in 1979, the year Margaret Thatcher was elected. After that, all the implications of his study for policy simply dropped off the political agenda. Townsend was a dogged chronicler of, and campaigner against, the subsequent widening of the income gap. But during the long Conservative years his was a marginal voice. He had brief hopes when New Labour arrived [(!)], and especially after Tony Blair pledged to eliminate child poverty in 1999. In the end, however, he was left bitterly disillusioned, acknowledging that Blair and Gordon Brown were redistributing to the poor, but profoundly offended by the mean-spirited way in which he thought they went about it. He was troubled not only by the endless emphasis on benefit claimants who “played the system”, which he felt stigmatised the honest majority, but also by the reliance on tax credits, as opposed to simple entitlements that were paid as of right.”

      – A lot of effort’s been spent on disputing the poverty line & where it lies, in recent years, and, “what’s meant by poverty” – in a smokescreen/diversion from the issue.

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  8. something survived...

    If you have lots of kids or a seriously disabled kid, child excluded from school, child with learning disability/difficulty, child with behavioural or mental health issues, child with criminal record, child with substance abuse, child who self harms, child who is single mother (or father!), ETC ETC,
    then of course it probably costs much more to keep them. If your disabled kid isn’t recognised as disabled by the authorities you must pay yourself for anything and everything you/they need, or go without. If your child has a rare condition the NHS doesn’t/can’t/won’t treat or fund. If an NHS treatment is not funded in your area for a kid and you have to pay all the kid’s private medical bills (which could be 6 figures not 5). If it was a genetic condition, siblings and you the parents, possibly also your own living parents, could all share the condition and need care. If your kids go to a school they don’t fund travel to, particularly if they go to different schools and you need a bus/train season ticket or extra petrol to drive them. If they need adapted home/school, adapted transport, and mobility equipment. If for various reasons you have to home-school them. If you need to travel across UK or even abroad for your kid’s medical treatment.

    Stats seem to assume:
    -All families are nuclear with both parents together and in paid work, always in excellent health and never take a day off sick.
    -Child ablebodied, and also never sick. (Fictional child that hasn’t been invented yet!)
    -That parents’ jobs are secure for the long term and pay enough to cover the rent, mortgage, outgoings, AND have enough to cover the child’s expenses.
    -That nobody is ever made redundant, fired, gets too sick/disabled to work, etc. That nobody needs time off to have another kid, or attend clinics.
    -That self employed people always have work lined up.
    -That nobody ever dies.
    -That nobody ever divorces or separates. That nobody has to pay for 2nd/3rd families, extended family, inlaws, parents, other relatives, friends, etc.
    -That only underclass and working class families can be dysfunctional.
    -That nobody pays for private fertility treatment or a private adoption/fostering service.Or surrogacy (legal if surrogate abroad).
    -That houses never go wrong/need fixing. That nobody has fires, floods, leaks, etc.
    -That all cars are perfect and never break down or crash, are stolen, are crashed into.
    -That nobody needs to move house and pay associated expenses like deposit, removal van, mail forwarding…
    -That no couples have very unequal incomes. That no self employed person, or person on shift/irregular/commission work, has a very fluctuating/intermittent income.
    -That if you have prior financial commitments (TV/phone/internet contracts for example), you can say ‘please can the contract not apply to me’ the moment you lose income. That these things, and household bills, can pay themselves/do not need paying.
    -That if you can’t pay your mortgage your house won’t be repossessed. That if you can’t pay your rent, your landlord won’t kick you out on the street and throw all your things away. That they will be happy to let you live there for free.

    I know the address of the above place, it is called Cloud Cuckoo Land.

  9. Pingback: Child Tax & Welfare Benefits: Their Possible Effect on Population Growth | WildSurvive

  10. Off topic, came across this on facebook, could this be the real reason for the bedroom tax, councils becoming PRIVATE landlords? – http://www.thisisstaffordshire.co.uk/Stoke-Trent-council-flats-rented-privately/story-19896146-detail/story.html#axzz2h2bEcyns

  11. 30,000 on 50k plus have registered 200,00 haven’t. When benefits are assessed for single parents or the unemployed, all of their income is taken into account and their benefit withdrawn pound for pound of earned income or if there is a rise in child benefit which is deducted from any other benefits, making it a case of only those off benefits altogether benefit from a rise in child benefit – something I used to fight about at budget time over the past 30 years when governments were bragging about increasing child benefit because the richest benefitted while the poorest had it deducted from their income support.

    Another new morning programme from the BBC akin to ” saints and scroungers”, “claimed and shamed”, which looks more like claimed and framed, taking pictures of those on the sick with bad backs bending down.

    Finally I have been told by the council that the help they are providing to cover bedroom tax for a couple of months is a one off so I should :-

    Look for a home with a lower rent.

    Apply for a house from a registered social landlord (which this house is).

    Ask your landlord to lower the rent (which I have done and was refused).

    I don’t think they will be satisfied until we are living in tents.

  12. Another failure to go with UC (UC is on hold). This month supposed roll out nationwide will no longer take place, as the full scale of the DWP shambles is uncovered:
    Causes of UK Agile Mega-Project Failure Examined
    http://www.infoq.com/news/2013/10/noa-uc-failure-report

  13. i never knew you had to register those payments with the tax office.

  14. Lin Homer needs to get off her backside! This is going to cost more to implement than any money saved…this is why previous governments toyed with the idea and then abandoned it because when the costings came in they could see it was not viable.Another thing to bear in mind is that HMRC have got rid of so many staff that there are not enough available to implement it. Believe me they want it to fail so that they can use it in preparation for privatisation of HMRC…then watch your tax bills go up!

  15. Liam Byrne is out as Shadow Work and Pensions Secretary, Rachel Reeves takes over as IDS’ shadow. Let’s hope this shadow doesn’t copy IDS move-for-move eh?

  16. the middle class are like fleas and tiks always scroungeing

  17. i also forgot ..bloodsucking and being cheap and miserly,lol,lol

  18. Pingback: The Mass Middle Class Benefit Fraud That Could ...

  19. It’s most unlikely that more then a handful of the middle class will ever get into trouble with this government, as this government only goes after the poor.

  20. Pingback: The Mass Middle Class Benefit Fraud That Could ...

  21. Just spotted this in the Liverpool Echo

    ‘Joe Rielly, Camerons bedroom tax coming home to roost’

    Curious what people think of it?

  22. “THE DWP EVEN DISCRIMINATE AGAINST DISABLED STAFF WHO WORK FOR THEM”

    Strangely they terminated an employees contract for having aspergers syndrome. The employee won her appeal tribunal then they refused to re-employ her due to her ailment…………

    ,,,,,,,,,,,,,,,,,and yet ATOS find you fit for work if you have aspergers…..

    DUAL STANDARDS OR WHAT?

    The Department for Work and Pensions (DWP) has been ordered to pay a woman with Asperger’s syndrome a total of £70,000 after an employment tribunal found the DWP to be guilty of disability discrimination. The DWP was found by the tribunal to have subjected the claimant to harassment due to her Asperger’s. The tribunal initially awarded damages to the claimant of £54,000 as compensation for constructive unfair dismissal and disability discrimination. In a further hearing, another £17,500 was ordered to be paid by the DWP for failing to comply with a re-employment ruling. (06/03/2013)

  23. Pingback: The Mass Middle Class Benefit Fraud That Could ...

  24. Liverpool echo-Wirral mum in £36,000 benefit fraud.

    Obviously not middle class then?

  25. But yes, this change was much more about eroding the principle of a universal welfare state than it ever was about saving money.
    FTFY, Johnny.

  26. There is a fundamental flaw in this particular daft idea.

    Where you have a couple, so long as one is earning under £50K, there is no way of implimenting this legally. Neither partner has to disclose to the other what their income is, nor what benefits they are claiming. So an under £50K earning partner may claim – perfectly reasonably that they were unaware that their dual income was over the £50K threshold, while the non-claiming partner may claim, again perfectly reasonably, that they were unaware that there partner was claiming the benefit.

    Enforcement is dodgy as hell. Fine a non/low-earning claimant because their partner lied about their income to them? Fine a high earner because their partner did not disclose they were claiming?

    You do not legally need to disclose your finances to your partner, this stipulation requires it, and may result in someone being jailed over this non-disclosure.

  27. Best place for them jail, they have all voted for a bunch of gangsters. I wonder if they would still be able to claim their married tax allowance?

  28. @all and @johnyvoid there seems to be a concerted effort by deniers to lie and distort benefit related deaths on twitter lately anyone wanna tell me why and who is behind it all ??

  29. my girlfriend is still claiming child befits
    and she ain’t got here kids

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