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Benefits fraud less than one per cent

15 May 2014

The latest Work and Pensions Committee report Fraud and error in the benefits system shows that official data shows that there is nearly twice as much error as fraud in the benefits system.

The official figure for fraud is 0.7% yet the general public’s misperception is that it is 34 times higher (23%).

The Committee recommends that to, avoid public confusion, the DWP should publish statistics relating to the estimated level of benefit fraud on a separate day from those related to error in the benefits system.

Dame Anne Begg MP said:

"Statistics relating to benefit fraud are often conflated in media reporting with those relating to error; and people’s perceptions of the level of benefit fraud are completely out of kilter with the official estimate. This is not helped by the Government publishing all of the statistics simultaneously. Whilst we understand that the boundary between claimant error and fraud is not always clear, we believe that publishing separate summaries of estimated fraud and error rates would be helpful."

The report is also concerned how the DWP will manage the housing costs element of Universal Credit without increased risks of fraud and error.

As a way of combating fraud and error the report recommends:

  • DWP and HMRC should explore, with the Payments Council and the banking sector, the feasibility of establishing a system which flags up potentially incorrect benefits and Tax Credits payments, using data held by payments systems operators and banks on the types of payments due to enter individual bank accounts.
  • In the longer term biometric identity systems could have an important role to play in identity verification processes across government. The Cabinet Office is working on a government-wide system; the Government should evaluate the benefits of biometric identity verification in the social security system and more widely across public services.
  • The Committee recommends that a Single Fraud Investigation Service (SFIS) a DWP-run service which will investigate all social security benefit fraud across DWP, HMRC and local authorities, be implemented, as far as is practicable, in line with the roll out of Universal Credit. The Government’s current timetable for SFIS implementation would see responsibility for Housing Benefit fraud investigations transfer from local authorities to DWP before the Department plans to take responsibility for housing costs support under Universal Credit across the country.

You can view the report at http://www.parliament.uk/business/committees/committees-a-z/commons-select/work-and-pensions-committee/news/report-published-fraud-and-error-in-the-benefits-system/