Level of benefit fraud and error unchanged last year

Thu, 09/05/2013 - 15:23 -- nick

Benefit fraud and error was unchanged at 0.7% of all payments last year, the Department for Work and Pensions (DWP) has confirmed.

In total £3.5 billion was overpaid in 2012-13, of which £1.2 billion was due to fraud and twice as much, £2.3 billion, was due to error by both claimants and DWP staff.

Despite the larger part played by mistakes in the system, and the lack of change compared to the year before, Minister for Welfare Reform Lord Freud chose to highlight fraud figures:

"Universal Credit will revolutionise the welfare state and ensure that the unacceptable levels of fraud in the benefit system are reduced considerably.

"The Universal Credit system will be much easier for individuals to understand, less vulnerable to human error, and more difficult for people to play the system.

"But our fraud investigation teams are also continuing their hard work – targeting areas of suspected high fraud, using the latest technology to investigate these criminals and going back over old claims to uncover people trying to swindle the taxpayer."

The error issue is similarly neglected by the government in the range of measures it has put in place to deal with overpayments in the last year.

All six of them, from targeting high-fraud areas to using the Proceeds of Crime Act to confiscate assets, are aimed at combatting fraud, while only one of them also aims to reduce error.

The government expects its introduction of Universal Credit to reduce both fraud and error in the benefits system.

However, reports of problems with the new £500 million IT system have meant the pilot has been reduced from four areas to one.

It has been reported that the pilot will only include simple cases where claimants have no additional needs and where their claims are new, raising questions on how thoroughly it is likely to test the system before its nationwide launch.

Question marks exist on whether this complex system will increase error even as it targets fraud, with the move to direct payments of housing benefit to claimants providing more opportunities for mistakes to be made.

The latest news from the government downplays the more significant issue of benefits underpayment.

This totalled £1.4 billion last year, potentially pushing those who needed these benefits into poverty and hardship.

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