Fraud And Error Soaring In Universal Credit And Benefit Underpayments Hit Record High

The UK’s biggest benefit scammer Lord Fraud.

Fraud and error in the Universal Credit system is soaring whilst the rate of benefits going unpaid overall has hit a ten year high national statistics released last week have shown.

Statistics examining fraud and error within the benefit’s system are released annually and this is the first year that Universal Credit has been included. Almost 250,000 people are currently claiming the new benefit which is set to eventually replace all mainstream out of work benefits along with tax credits and housing benefit. One of the reasons given by ministers for such sweeping changes to social security was that Universal Credit would help cut fraud and error within the system. Last week’s statistics show that the opposite is happening.

Over-payments due to fraud and error make up 7.3% of Universal Credit’s total expenditure – higher than any other benefit the DWP administrates. The over-payment rate for Jobseeker’s Allowance, the benefit with the nearest comparable caseload of claimants, is just 5%.

Universal Credit’s performance is equally woeful when it comes to people being underpaid their benefits with 2.6% of expenditure not going to those entitled to it. Almost all of this is down to offical rather than claimant error, and once again, it is higher than any other DWP benefit.

Underpayments across all benefits hit 1% last year, the highest figure since comparable figures began in 2005.  And in another record for the DWP, the rate of benefits claimed fraudulently also hit a ten year high – although there is more to be said about this below.

To read lying bastard Lord Fraud’s gushing press release which accompanied these statistics you would not know any of this. Fraud and error combined is at a record low according to the Minister for Welfare Reform, when the truth is that the figure is unchanged since last year. The department also points out that both claimant and official error have fallen to record lows and makes no mention of the rise in fraud that has offset this. Neither do they mention the rise in under-payments.

The truth, as the Office for National Statistics (ONS) explains, is that in 2013/14 a change in how fraud and error were recorded resulted in many cases which were previously viewed as being an error being re-classified as fraud. This is the reason that errors in the most recent period are at record lows and also the reason that fraud over-payments are at record highs. According to the ONS this change means that “results post 2013/14 cannot be directly compared with the earlier results”. Yet that’s exactly what the DWP has done in an attempt to hide the truth about fraud and error within the system.

Despite all this, what the figures show is that fraud within the benefit’s system is very low, at just 0.9% of total expenditure. And even then these figures are rigged to maximise the chances of payments being recorded as claimant fraud rather than error.

The fraud and error statistics are collected by carrying out ‘benefit reviews’ on a small percentage of claimants and then using the outcomes of these reviews to calculate an approximate figure across the entire benefits system. What this means is that a claimant will receive a letter and then be expected to attend an interview where they will be interrogated about their benefit claim. These reviews are carried out at random, so if you get a letter about it don’t shit yourself and try to establish if this is a fraud ivestigation or a benefit review. Fraud investigations are usually carried out under caution, whereby anything you say may be used against you in a court of law.  You should be informed of this.

Two of the more common outcomes to these reviews are that the claimant is untraceble or found to be abroad. This is automatically viewed as being fraud when it could simply be that the claimant has moved house, informed the DWP and it has not been correctly recorded. It could also mean a landlord is still picking up housing benefit payments for a tenant that has long since moved out. Not all benefit fraud is carried out by benefit claimants.

Sometimes when a claimant is scheduled for review they report a change in circumstances or end their claim during the process. Again this is automatically recorded as fraud when it could just be a coincidence and simply mean they got a job. The same applies when there is a ‘loss of claimant contact’ meaning the benefit review is not completed for some unspecified reason. For the purposes of these statistics, an outcome of fraud does not mean someone has been prosecuted, or that a fraud has been admitted. It simply means that benefits were reduced or stopped as a result of the review and the DWP believes that the claimant was deliberately acting fraudulently.

Even with this calculated book-cooking the statistics show one stark fact. The total amount of money lost through fraud in 2015/16 was £1.6 billion and this is less than the amount of benefits which were underpaid which stands at £1.8 billion. Someone’s getting shafted alright, but it’s not the DWP, it’s us. Check your claim, make sure you’re getting every fucking penny you are entitled to.

Read the most recent Fraud and Error statistics and the background notes on how they are calculated (pdf).

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Grass Up Your Neighbours Say The DWP With Another Boring Benefit Fraud Campaign

With the amount of money lost to fraud and error in the benefit system reaching record highs under this Government, the DWP has issued a call for people to grass up their nieghbours if they suspect them of low level benefit fraud, or even going on holiday.

The latest boringly predictable campaign is not aimed at high level organised fraud, such as people setting up fake identities to claim benefits.  Neither is it aimed at landlords picking up Housing Benefit cheques long after tenants have departed, or exploitative employers paying cash to cut down on their National Insurance bill – or even dodge the minimum wage.  It is not just a fraction of a parcentage of claimants who benefit from working cash in hand, but often the latte slurping middle classes who are quite happy to look the other way if it gets them a cheap builder.

Instead this campaign is aimed at struggling single parents who might have a partner staying a few times or week, or sick or disabled people whose condition has improved slightly.  Or even people on benefits taking a short break away from home.  According to the department a range of “television and radio adverts, posters, letters and Facebook ads ” have been produced warning claimants they face jail for failing to report a change in cirumstances.   This new campaign is not about saving money, it is about ensuring claimants lead a life of misery and fear.

At the heart of the new campaign is the Benefit Fraud Hotline.  This is the telephone line that people can ring anonymously to stich up their neighbours, ex-partners or anyone else they may have taken a dislike to.  Barely any prosecutions result from these calls and the vast majority are simply malicious.  There are no consequences for those making false allegations.  And there  should be.  Anyone who rings this hotline for any reason other than to grass up a Tory councillor  is a filthy fucking scab who should be shunned by their communities.

The rules on benefit fraud are breath-takingly complex.  There is no clear information on when you should declare yourself fit for work and end a claim for sickness or disability benefits.  A single parent who has a partner staying a few nights a week may or may not be breaking the law, and might only find out themselves when they are threatened with prosecution for having a shag.  If someone on the dole is offered fifty quid to clear someone’s garden they are  expected to immediately report that to the Jobcentre – throwing their claim into chaos and ensuring they will barely see a penny for their work.  Yet these people, scraping by to survive, are now seen as the worst kind of criminals and splashed across the front pages.

Of course when the well off commit benefit fraud there is no such outrage.  HMRC recently sent out letters to 30,000 high earning parents warning them they need to contact them to ensure they aren’t receiving too much child benefit.  They were supposed to have done this nearly two years ago.  A couple with two children will have scammed around £3000 that they are not entitled so far.  But no-one seems to really care.

The difference in language is staggering.  Reported in thisismoney.co.uk a Treasury spokesperson said: ‘These letters are simply designed to help taxpayers get their returns right by raising awareness of the High Income Child Benefit Charge (HICBC), and to remind customers who file under self assessment of the importance of including HICBC on their return.” 

Compare this to the comments made by the DWP about people  who are poor falsely claiming benefits: “At the Department for Work and Pensions we’re determined not to let benefit cheats get away with it. The majority of claimants are honest, so why should everyone else pay the price? We’re using all the resources available to track down cheats and make them face the consequences. … People who are caught deliberately withholding information needed for their benefit claim are benefit cheats.  They could face a range of consequences for their actions. For example:  …   serving a prison sentence”

There really are one set of laws for the poor, and very different laws for the rich.

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DWP Are Trying To Hide The Truth But The Amount Lost To Fraud And Error Is At A Record High

Figures released from the DWP show that benefit over-payments due to fraud and error remained at a record high of £3.3 billion in 2013/14, but you wouldn’t know this from reading the gushing press release that accompanied the statistics.

Instead the DWP boldly claims that Jobseekers Allowance and Income Support over-payments are at their lowest recorded levels.  But these represent just ten percent of the total amount lost through fraud and error.  The amount of Housing Benefit overpaid, for example, has soared to £1.38 billion and is by far the largest source of fraud and error in the system.  No-one seems to be checking how much of this figure ended up in the pockets of landlords.

With Iain Duncan Smith busy bungling the launch of Universal Credit, it was left to the Minister for Welfare Reform, the aptly named Lord Fraud, to defend the figures, which he did by if not lying through his teeth, then deliberately distorting the truth.  According to the minister: “It is encouraging to see that the level of fraud and error is now lower than before the start of the Parliament.”

The rate of over-payments dropped from 2.2% in 2009/10 to 2% in 2010/11 and has stayed there ever since.  According to the DWP themselves this is not statistically significant and could be due to inaccuracies in the data.  The cost of fraud and error however has risen since the start of this Parliament and it is this that the DWP is trying to hide.

On face value it looks like over-payments fell in the last year, from £3.5 billion to £3.3 billion.  But this is because Council Tax Benefit expenditure was not included in the figures after being scrapped in April 2013.  Over-payments in Council Tax support schemes are no longer the DWP’s problem, and so will no longer be included in the statistics.

The table below shows amount lost through fraud and error if Council Tax Benefit is also excluded from the previous year’s figures.  What it shows is that the cost of over-payments rose year on year since the election and then hit £3.3 billion for each of the last two years.  This was not explained in Lord Fraud’s press release and the real numbers can only be found in Annex 6 on the very last page of a 147 page DWP report (pdf).

The truth about the amount lost to fraud and error in the benefits system is that’s it’s not very much and whilst it has risen slightly it hasn’t really changed significantly since this Government weren’t elected.  This is a huge embarrassment to Iain Duncan Smith who is currently squandering the best part of a billion pounds in an attempt to halve benefit over-payments by next year.  It is unsurprising that the DWP’s fraud and error strategy was this week given a red/amber rating (meaning it’s a fuck up) in the same Government report into major projects that revealed that Universal Credit has been ‘reset’.

The amount of money lost only to fraud in particular is very small – around a billion a year for all benefits, including pensions.  This is less than the amount of benefits which are underpaid, which stands at £1.4 billion.  The report which accompanies the over-payment statistics, contains some interesting details, such as the amount lost to fraud due to people on the dole working on the side being estimated to be as little as £59 million – about a quid a year for every person in the country.  Tax avoidance and evasion was about £35 billion in 2010/11, costing us each nearly £600 a year.  You won’t see that in a DWP press release.  Ever get the feeling you’ve been cheated?

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

HMRC 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.

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Why Single Mums Stay Single

It’s hardly surprising that Cameron and his party should hate women so much.  After all other than the odd thrashing by nanny, they probably never saw a real one until they left the torrid dormitories of Eton.

Cameron’s recent pathetic attempt to appeal to women,  offering them the opportunity to become skivvies for the rich, recently fell as flat as his regular sexist behaviour in the House of Commons.  So in time-honoured tradition they are turning their attention to the usual Tory scapegoat,  single mums.

The DWP has announced tough new measures aimed at feckless single parents who are caught living with a partner and not informing the benefits office.  Lord Fraud has declared:

“Pretending you are a single parent to get benefits when you are actually living with a partner is stealing money from the people who genuinely need help.”

Which is a rather strange way of looking at it, when in fact if they are stealing from the government.  By the same logic you could argue they were stealing from the Queen, which perhaps wouldn’t have had the same impact that Freud was hoping for.

Under the ‘tough’ new measures anyone convicted of benefit fraud three times in a row will be banned from claiming benefits for three years, a neat little way to ensure that their children should also suffer as much as possible.  The problem is, as it was revealed last time this was announced, no-one has ever been convicted of benefit fraud three times in a row.  Next week Lord Freud will be announcing legislation aimed at preventing armadillos being used as train drivers.

This isn’t what the law is supposed to be used for, inventing non-existent circumstances to further the myth that all claimants are on the fiddle.  This is PR, not legislation.  The law is being used to try and entrench the lie that fraud is endemic in the benefits system, when in fact fraud levels are tiny compared to comparable sectors, such as tax evasion.

So whilst this change won’t affect anyone at all, what is concerning is that on conviction for a first offence of benefit fraud, single parents could face having benefits stopped for 13 weeks.  That financial penalties like this should be tossed so casually on the very poorest families, where it will be the children who ultimately suffer for their parent’s crime,  is a fucking disgrace.

It is true that the public are not loving people who falsely claim benefits at the moment, and this, on the face of it, is fair enough.  The problem is that the benefits system is so complex and rigid that it can be virtually impossible to avoid some degree of breach of the rules at times.  If you are on Jobseekers Allowance and take twenty quid cash for helping a mate move you are a criminal.  If you are sick, but perhaps recover enough to not quite be eligible for benefits, and don’t tell them quickly enough, you could face prosecution.  If you inherit a sum of money, and neglect to inform the DWP so they can knock the exact same sum of money from your benefits,  you may very likely face jail.

For single parents however the situation is even more difficult for two reasons.  The first is that if you begin a co-habiting relationship then your partner is immediately expected to take full financial responsibility for you and your children or you (not your partner) will be prosecuted.  This places a heavy burden on a blossoming relationship, especially as if the partnership doesn’t work out you will be at the mercy of the DWP as to whether they accept the relationship has ended and restore your benefits.

The second problem is that there are no clear guidelines as to what living with a partner actually means.  A common urban myth that if your partners stays over three nights a week then you are deemed to be living with them is simply not true.  In fact all measure of factors are considered, or not considered, including whether you have sex with them (although they are not supposed to ask you this directly), and whether you are viewed by others as being in a co-habiting relationship.  The full guidance for DWP decision makers on co-habiting couple can be downloaded at (PDF): http://www.dwp.gov.uk/docs/dmgch11.pdf

Ultimately it may not be clear whether a parent has broken the law until they face a court, and of course this uncertainty infects the whole system.  Therefore it is not uncommon for claimants to be told by misinformed DWP officials that even spending one night with a partner could leave them liable to prosecution.  The confusion, and chilling effect this  can have on the ability of single parents to form relationships, can be summed up by this thread on the netmums forum where one poster asks:

“I don’t get the rules to be honest, If I go on a date with someone would I have to inform anyone, Also if you have been going out for 2 weeks or something are they expected to move in and financially contribute? Wouldn’t that just be rushing things so to speak?”

The problem is made worse by the Benefit Fraud Hotline, which means any snivelling grass can ring the DWP and report you because they don’t like you and saw you holding someone’s hand or snogging at the bus stop.  Whilst prosecution based on flimsy evidence like this is unlikely, even an investigation can lead to the suspension of benefit payments, as well as the stress of facing a huge fine, criminal record, all benefits stopped for thirteen weeks and even imprisonment.  All just for having a shag.

Wanker Freud informs us not to worry, because Universal Credit will ‘simplify and automate the benefits system to make it less open to abuse.’  So perhaps a computer will decide whether people are in a relationship or not in future, another magical feature of the new IT system which is set to be the most complex and large scale project ever attempted anywhere ever.

In fact Universal Credit, when it is rolled out in 2057, will do nothing to stop the problems outlined above.  All it will actually do is remove humans from the equation.  Which is okay because computers can#amp/’t make mistakes.

There is obviously no excuse for benefit fraud (well, apart from poverty, the challenges of raising children alone, lack of clarity in the rules and the ever moving goal posts).  People with multiple claims or dodgy landlords claiming for non-existent tenants should be condemned and treated the way we treat any else who rips off the tax payer, such as giving them a knighthood and then taking it away a year later.

But these rules are not aimed at organised fraud.  They are aimed at people just getting by, who may have made a mistake, or not declared a few quid here and there.  Compared to the huge sums lost due to tax evasion this is a trivial sum of money, that will place added stress on already over-burdened single parents should they commit the crime of falling in love.

Whilst MPs who did far worse were simply allowed to repay dodgy expense claims, single parents and claimants face abject poverty and even jail for far lesser offences.  However the stories of people going hungry, families separated and children being taken into care will not feature in the press who instead prefer to salivate because a one legged man has been caught playing golf or a wheelchair user went on holiday.