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24Apr08

BENEFIT FRAUD AND OVERPAYMENTS UP

Today a Government report revealed it is losing £2.7 billion a year in benefit overpayments, including to those already with jobs, those living abroad, and even people in prison. The overpayments include:

£760 million a year overpaid Housing Benefit
£610 million a year overpaid Income Support and Jobseekers’ Allowance
£360 million a year overpaid Pension Credit

Overpayments for Income Support and JSA are up 9%. Overpayments for Housing Benefit are up 7% since 2003. Pension Credit overpayments have increased by around 11% since 2006 although the highest estimate is 61%. Pension Credit payments due to fraud alone are estimated to have doubled since 2006. Further breakdown of the figures reveals:

£4 million lost in overpayments to people in prison.
£78 million overpaid to people abroad.
£46 million overpaid to people who have given a false address.
£89 million overpaid to people who have not declared their earnings properly.

The Government has been forced to raise its estimates of the amount lost in benefit overpayments since it published its official accounts last September when it estimated it had lost £2.5 billion in overpayments the previous year.

Fraud and error in the benefits system is on the rise, despite the Government spending £154 million last year on tackling fraud. Commenting on the report parliamentary candidate Mark Versallion said, "I can't believe how wasteful this is and how incompetent the Government can be. It is paying out vast amounts of taxpayers’ money like it's confetti and to the wrong people. It beggars belief that it's paying out benefits wrongly to people in prison, given that the Government knows who they are and where they are.”

Sources:
DWP, Fraud and Error in the Benefit System, Oct 2005 to Sep 2006, published April 2007.
DWP, Resource Accounts 2006-07, published Sep 2007.
National Audit Office, Department for Work and Pensions, Progress in Tackling Benefit Fraud, Jan 2008.