Crackdown on benefit fraud

New laws are being introduced to crackdown on benefit fraud, Prime Minister Keir Starmer has announced.

The fraud, error and debt bill will be brought forward, giving the Department for Work and Pensions (DWP) more power to stop fraud and recover money lost, while also stopping vulnerable people from getting into debt.

What is benefit fraud?

If you claim money you’re not actually entitled to, that’s benefit fraud.

It can look like:

• falsely reporting or failing to report income
• claiming unemployment benefits while employed
• faking an illness or injury to get unemployment or disability benefits
• not declaring you live with someone who contributes to the household income
• falsifying accounts to make it seem like you have less money than you do

Benefit fraud doesn’t always have to be intentional. You can also commit ‘fraud by omission’ if you didn’t know you have to report any changes (or if you forget) to your situation, e.g. moving in someone who supports you financially.

Mistakes can – and do – happen so make sure you let DWP know when your circumstances change.

Why is benefit fraud a problem?

Benefit fraud currently costs taxpayers almost £10bn a year. Since the pandemic, £35bn has been taken away from those who need it most.

It’s a serious crime which can result in an unlimited fine, seven years in prison or both. You’ll also risk losing your benefits, as well as being expected to repay any overpayments.  

New powers

The bill will allow DWP to:

• better investigate suspected fraud
• recover debts from those who can pay money back but have avoided doing
• require banks to share data that might show potential benefit overpayments

DWP won’t have access to anyone’s bank account and they won’t share any personal information with third parties.

Staff will also be trained “to the highest standards” and new oversight and reporting measures will be introduced to safeguard those who are vulnerable.

We’d expect robust measures to be in place so those who’ve received an overpayment due to a genuine error won’t be unfairly prosecuted.

Our director of external relations, Sebrina McCullough, explained: "Around 30% of benefit claimants seeking debt support each day do so as a direct result of being unable to repay a benefit overpayment. Often the problem doesn’t lie with the claimant, but with how the claim is processed.

"We’ve even seen several instances where on investigation people were found not to have not been overpaid but were still pursued for money."

We also want to see a simpler, streamlined system so that everyone who qualifies for support knows they should be claiming – around £20bn of benefit entitlement goes unclaimed each year.

McCullough added: "We await the full detail of the legislation, but suggest at this point that it is more likely to harm vulnerable people than it is to prevent large-scale fraud."

What happens next?

No date has been set yet, but further details will be revealed when the bill is introduced.

The government will also consult on a code of practice before the fraud, error and debt bill comes in, but we don’t yet know when this will happen.

Keep an eye on our blogs – we’ll be covering any updates and new information in the coming months.