Benefit fraud
Encyclopedia
Benefit fraud is a form of welfare fraud
as found within the system of government benefits paid to individuals by the UK welfare state
.
(DWP) define benefit fraud as when someone obtains state benefit they are not entitled to or deliberately fails to report a change in their personal circumstances. The DWP claim that the amount to fraudulent benefit claims amounted to around £900 million in 2008-09.
The most common form of benefit fraud is when a person receives benefits, but continues or begins employment. Another common form of fraud is when the receivers of benefits claim that they live alone, but they are financially supported by a partner or spouse.
In 2002, the DWP launched a Targeting Benefit Thieves advertising campaign to spread the message that benefit fraud carried a criminal sanction. The most recent campaign makes claims about the likelihood of getting caught and the consequences of committing benefit fraud using ‘And they thought they’d never be caught’ as the leading slogan.
Since the introduction of the Welfare Reform Act 2007
, councils can now independently investigate a number of Social Security benefits.
Officers can contact private and public organisations that hold information on a suspected benefit thief including banks, building societies, utility providers. If evidence is found that benefit fraud has been committed, any of the following may happen:
The main criterion for the offering of a caution is that the person has to have admitted that they have committed an offence. Other than this criterion, there is no statutory framework regulating which sanction is used in disposal of a case. This is a matter of policy for the relevant authority. The Department for Work and Pensions has a national policy, each Local Authority will have its own Policy which will set different criteria and financial guidelines.
The Administrative Penalty is effectively a fine and is set at 30% of the total amount overpaid to them. This figure is set in Section 115 of the Social Security Administration Act 1992
, there is no negotiation on this. In addition to this, benefit thieves also need to pay back all of the money they deliberately defrauded. The suspect does not have to admit their guilt to be offered an Administrative Penalty, however it should only be offered by the Department for Work and Pensions, or the Local Authority if they believe there is sufficient evidence for court proceedings to be considered if the offer is refused.
Prosecution may typically occur in England & Wales using the Social Security Administration Act 1992
, or under the Theft Act 1978
, or the Fraud Act 2006
; in Northern Ireland under corresponding legislation; or in Scotland under Common Law Fraud. A Prosecution is brought when the value of the overpaid benefit is so great, or the period of the fraud is lengthy, or the person may have been in a position of trust, or the fraud was very blatant. Any prosecution brought by the Department for Work and Pensions or a Local Authority should have been subject to the Public Interest Test as set out in the Code of Practice for Crown Prosecutors. In Scotland cases of benefit fraud are reported to the Procurator Fiscal for prosecution.
(where no dishonesty is alleged) or under s111A of the same Act (where dishonesty
is alleged). There are a number of legal cases relevant to prosecutions under these sections. Key points are dealt with in more detail in technical articles on benefit fraud.
The penalties for benefit fraud may be mitigated where it can be shown that the defendant would have been entitled to other forms of financial benefit, such as UK Tax Credits, had an appropriate claim on the true facts been lodged at the time.
A person convicted of benefit fraud may be held to have a 'criminal lifestyle' in confiscation proceedings under Parts 2, 3 & 4 of the Proceeds of Crime Act 2002
.
Welfare fraud
Welfare fraud refers to various intentional misuses of state welfare systems by withholding information or giving false or inaccurate information. This may be done in small, uncoordinated efforts, or in larger, organized criminal rings...
as found within the system of government benefits paid to individuals by the UK welfare state
Welfare state
A welfare state is a "concept of government in which the state plays a key role in the protection and promotion of the economic and social well-being of its citizens. It is based on the principles of equality of opportunity, equitable distribution of wealth, and public responsibility for those...
.
What is benefit fraud?
The Department for Work and PensionsDepartment for Work and Pensions
The Department for Work and Pensions is the largest government department in the United Kingdom, created on June 8, 2001 from the merger of the employment part of the Department for Education and Employment and the Department of Social Security and headed by the Secretary of State for Work and...
(DWP) define benefit fraud as when someone obtains state benefit they are not entitled to or deliberately fails to report a change in their personal circumstances. The DWP claim that the amount to fraudulent benefit claims amounted to around £900 million in 2008-09.
The most common form of benefit fraud is when a person receives benefits, but continues or begins employment. Another common form of fraud is when the receivers of benefits claim that they live alone, but they are financially supported by a partner or spouse.
In 2002, the DWP launched a Targeting Benefit Thieves advertising campaign to spread the message that benefit fraud carried a criminal sanction. The most recent campaign makes claims about the likelihood of getting caught and the consequences of committing benefit fraud using ‘And they thought they’d never be caught’ as the leading slogan.
Examples of alleged benefit fraud
In recent years the term benefit fraud has been used by the DWP to encompass a wider range of behaviours, beyond simultaneously claiming unemployment benefit whilst working in the informal labour market. Their 2007 'No ifs, No buts' campaign emphasised other activities that could lead to prosecution. This includes failing to inform the state that your partner is now living with you, or that you have moved house, or that a relative has died, leaving you some money.Since the introduction of the Welfare Reform Act 2007
Welfare Reform Act 2007
The Welfare Reform Act 2007 is an Act of the Parliament of the United Kingdom which alters the British social security system. A number of sections come into force two months after royal assent and the first commencement order made under the Act specified that section 31 came into force on 1...
, councils can now independently investigate a number of Social Security benefits.
Claims of persecution
The political scientist Adam Taylor claimed that the targeting of benefit-fraud was disproportionate and was evidence of "government using strong-arm tactics on the urban poor." Taylor argued that the amount of money lost to false benefit claims was small compared to the amount lost to tax fraud which he estimated costing the UK economy £150bn, yet comparatively little was done to pursue tax evaders. Taylor claimed that the crucial difference between these two practices is that "the former is committed by the weakest and most vulnerable of society, while the latter is committed by the richest and the most powerful."How is benefit fraud assessed?
When investigating cases, Fraud Officers will collect facts and a decision will be made on whether or not to take further action. They may gather information about the claimant and their family members, then compare it with information already given on claim forms or in interviews.Officers can contact private and public organisations that hold information on a suspected benefit thief including banks, building societies, utility providers. If evidence is found that benefit fraud has been committed, any of the following may happen:
- prosecution
- pay a penalty as an alternative to prosecution
- the benefit may be reduced or withdrawn
- overpaid benefit will have to be paid back
- confiscation of homes and possessions
Benefit fraud abroad
Some UK benefits can not be claimed when people go abroad. Between April 2008 and March 2009 it is estimated that £55 million was lost as a result of benefit fraud overpayments to British claimants who did not tell the authorities they were living or travelling abroad.Penalties
When someone is caught for benefit fraud there are three key 'sanctions' that DWP or the Council can apply. These are formal cautions, administrative penalties and prosecution.The main criterion for the offering of a caution is that the person has to have admitted that they have committed an offence. Other than this criterion, there is no statutory framework regulating which sanction is used in disposal of a case. This is a matter of policy for the relevant authority. The Department for Work and Pensions has a national policy, each Local Authority will have its own Policy which will set different criteria and financial guidelines.
The Administrative Penalty is effectively a fine and is set at 30% of the total amount overpaid to them. This figure is set in Section 115 of the Social Security Administration Act 1992
Social Security Administration Act 1992
The Social Security Administration Act 1992 is the main piece of legislation dealing with the administration of social security benefits in the United Kingdom.- History :...
, there is no negotiation on this. In addition to this, benefit thieves also need to pay back all of the money they deliberately defrauded. The suspect does not have to admit their guilt to be offered an Administrative Penalty, however it should only be offered by the Department for Work and Pensions, or the Local Authority if they believe there is sufficient evidence for court proceedings to be considered if the offer is refused.
Prosecution may typically occur in England & Wales using the Social Security Administration Act 1992
Social Security Administration Act 1992
The Social Security Administration Act 1992 is the main piece of legislation dealing with the administration of social security benefits in the United Kingdom.- History :...
, or under the Theft Act 1978
Theft Act 1978
The Theft Act 1978 is an Act of the Parliament of the United Kingdom. It supplemented the earlier deception offences contained in sections 15 and 16 of the Theft Act 1968 by reforming some aspects of those offences and adding new provisions...
, or the Fraud Act 2006
Fraud Act 2006
The Fraud Act 2006 is an Act of the Parliament of the United Kingdom. It affects England and Wales and Northern Ireland. It was given Royal Assent on 8 November 2006, and came into effect on 15 January 2007.-Purpose:...
; in Northern Ireland under corresponding legislation; or in Scotland under Common Law Fraud. A Prosecution is brought when the value of the overpaid benefit is so great, or the period of the fraud is lengthy, or the person may have been in a position of trust, or the fraud was very blatant. Any prosecution brought by the Department for Work and Pensions or a Local Authority should have been subject to the Public Interest Test as set out in the Code of Practice for Crown Prosecutors. In Scotland cases of benefit fraud are reported to the Procurator Fiscal for prosecution.
Prosecution - legal points
Where cases of benefit fraud result in criminal prosecution, in England & Wales such prosecutions are generally brought either under section 112 Social Security Administration Act 1992Social Security Administration Act 1992
The Social Security Administration Act 1992 is the main piece of legislation dealing with the administration of social security benefits in the United Kingdom.- History :...
(where no dishonesty is alleged) or under s111A of the same Act (where dishonesty
Dishonesty
Dishonesty is a word which, in common usage, may be defined as the act or to act without honesty. It is used to describe a lack of probity, cheating, lying or being deliberately deceptive or a lack in integrity, knavishness, perfidiosity, corruption or treacherousness...
is alleged). There are a number of legal cases relevant to prosecutions under these sections. Key points are dealt with in more detail in technical articles on benefit fraud.
The penalties for benefit fraud may be mitigated where it can be shown that the defendant would have been entitled to other forms of financial benefit, such as UK Tax Credits, had an appropriate claim on the true facts been lodged at the time.
A person convicted of benefit fraud may be held to have a 'criminal lifestyle' in confiscation proceedings under Parts 2, 3 & 4 of the Proceeds of Crime Act 2002
Proceeds of Crime Act 2002
The Proceeds of Crime Act 2002 is an Act of the Parliament of the United Kingdom which provides for the confiscation or civil recovery of the proceeds from crime and contains the principal money laundering legislation in the UK.-Background:...
.
See also
- Tax EvasionTax evasionTax evasion is the general term for efforts by individuals, corporations, trusts and other entities to evade taxes by illegal means. Tax evasion usually entails taxpayers deliberately misrepresenting or concealing the true state of their affairs to the tax authorities to reduce their tax liability,...
- Carousel fraud
- Disability fraudDisability fraudDisability fraud is the receipt of payment intended for the disabled from a government agency or private insurance company by one who should not be receiving them or the receipt of a higher amount than one who is entitled to them should be receiving. There are various acts that may constitute...
- Welfare fraudWelfare fraudWelfare fraud refers to various intentional misuses of state welfare systems by withholding information or giving false or inaccurate information. This may be done in small, uncoordinated efforts, or in larger, organized criminal rings...
- Criticisms of welfareCriticisms of welfareThe notion, and the extent of, the modern welfare state has been criticised on both economic and social grounds, from both the Left and the Right of the political spectrum.- Libertarian & Conservative criticisms :...
External links
- Wallington comic fined for housing benefit fraud
- An example of benefit fraud
- Benefit fraud ring funds Islamic terrorists, The TelegraphThe Daily TelegraphThe Daily Telegraph is a daily morning broadsheet newspaper distributed throughout the United Kingdom and internationally. The newspaper was founded by Arthur B...
, November 18, 2001