Government aims to tackle waste with benefit fraud clampdown

The government is bringing forward new legislation to tackle waste in the social security system.

Fraud and error currently cost taxpayers £10bn a year, with £35bn in total being incorrectly paid out since the pandemic.

That’s why ministers are planning new measures which they believe will be tough on criminals and fairer to taxpayers.

Among the measures included in the Public Authorities (Fraud, Error & Recovery) Bill are:

• modernising the approach to preventing overpayments
• introducing new safeguards to protect vulnerable people
• removing driving licences from fraudsters if they owe £1,000 or more and have ignored frequent requests to repay the money
• new powers to recover money from people not on benefits or PAYE employment who owe money and won’t pay, even if they have the means

New law will protect law-abiding people

The Department for Work and Pensions (DWP) believes the new law will help it “keep pace with the sophisticated nature of fraud”, as well as make sure “law-abiding customers get the right benefits - preventing them from falling further into debt”.

“The measures in the Bill will be underpinned by a principle of fairness and proportionality,” the DWP said.

“The priority is always to negotiate affordable and sustainable repayment plans, with these powers to be used as a last resort.”

It is hoped that the measures in the bill will help the DWP save £1.5bn over the next five years.

Government ‘must distinguish between intentional fraud and genuine errors’

Sebrina McCullough, director of external relations at Money Wellness, responded by saying the government is right to ensure that people only claim what they are entitled to and to hold those accountable for intentional fraud.

However, she said it is “paramount” that ministers distinguish intentional fraud, such as that carried out by criminal gangs, from “genuine errors made by people trying to navigating an outdated, overly complex system”. 

“By far a greater problem is overpayment and how it’s clawed back, which forces claimants into crisis and situations where it’s impossible to live,” McCullough said.

“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.

“It's estimated that around £20bn of benefit entitlement goes unclaimed each year. 

“Any legislation must consider not just how to prevent fraud, but also how to use the data available to proactively engage people who should be claiming but do not know they are entitled. 

“The system must be simplified and streamlined which, in itself, should mean that issues naturally fall and fewer claimants will be vilified in the process."

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