Benefit Cheats

[Joa]

I couldn't help myself from adding to this thread, which has gone off the rails few time.

I wrote a paper few months ago about benefit fraud. I wanted to tell you that the figures which quoted as "lost to fraud" do not tell the whole story.

In 2003-04 DWP spent some £109 billion on a wide range of benefits, employment programmes and the associated administration costs. It estimates that around £3 billion of this expenditure may have been lost from benefit payments because of fraud and error, the same estimate as reported in 2002-03 and 2001-02 . However the figures also show that official error results in almost as much benefit being overpaid as claimant fraud.

It is therefore important to distinguish the losses suffered by DWP due to error and those which are caused by fraud. This is because, in my opinion and in light of this distinction, the headlines reporting 3billion loss are skewed and sensationalist.

Dean and Melrose (1995) who produced a paper “Manageable discord” found that the predominant reason for fiddling was economic necessity, inadequacy of benefit payments, lack of belief in the system and lack of opportunities. The principal preliminary findings were that those claimants that fiddled were not especially “streetwise”.

 

The research conducted in 2004 by Spark Research for DWP discovered that fraud investigators commonly accepted admission of an overpayment as admission of intent and that the claimants are being offered a caution under threat of being prosecuted if they do not accept it. This can lead to convictions for fraud in situations where claimant couldn’t have reasonably been expected to know that they are doing something wrong!

 

Poverty and financial need are often cited as the main reason for people claim fraudulently. CPAG’s Ten Steps to a Society Free of Child Poverty states that “safety net benefits are worth around £192 per week for a couple with children (…)- £80 less then the poverty line (£272). For a lone parent (…) the safety net is worth £160, some £29 less then the poverty line of £189”

 

Finally, there are vulnerable claimants, who are often illiterate, confused, unable to cope with complexity of the application forms, change of circumstances requirements and renewal forms. They very often are claiming many correlated benefits, like disability or sickness benefits, together with Income Support and passported benefits. They may have a care or prison background and very limited language skills. As the DWP does not see itself as having responsibility for ensuring that such people know what benefits are available, the question is - who is?

 

Not being able to understand what is going on with their claim, very often does not prevent claimants from being convicted of fraud. It doesn’t help that this particular group of claimants would find it very difficult to challenge an overpayment/eligibility decision; therefore they are the soft target, the easy statistics.

 

“Recent organisational change and the plan to shed a quarter of its workforce, possibly lowering morale and increasing turnover among the staff whose skills are most needed to combat fraud and error, will not make the Department’s job any easier.” These are comments made by Mr Edward Leigh MP, Chairman of the Committee of Public Accounts and contain, in my opinion, the other then fraud reason behind the large-scale losses suffered by DWP- an error made by the decision maker.

 

Common sense tells us that dissatisfied, disillusioned staff are bound to make mistakes. It is widely known in a welfare advice sector, that plenty of overpayment appeals are won for clients on grounds of an official error.

It is difficult to establish how much money exactly is lost through an official error, how much of it is recovered and how much is not recoverable. Additionally, we will never know, how much would not have been recovered if the claimant was able to appeal the original decision, instead of agreeing meekly with the overpayment decision. Mr Leigh talks about high level of error by staff making benefit payments costing the department estimated £1.5 billion a year.

An example of the scale of losses due to an error as opposite to fraud was made by Kate Nash, Chief Executive of RADAR who said: “In reality, fraud among people claiming Incapacity Benefit accounts for less than 2% of the Department for Work and Pension’s total expenditure on benefits. Fraud accounts for no more than £20m, with over £90m being wasted through errors that are not the fault of claimants.”

 

So, a massive 3 billion pounds leaks out of the DWP’s benefits budget. Most of this loss is preventable and at least half of it has nothing to do with “benefit cheats”. It would however be a political suicide for the department to admit it. The “scroungers” are a much more convenient headline.

 

And finally setmefree: how would you recognise between those "named and shamed" in your local paper which one of these people were elderly confused chaps who did not know that they have to report a minuscule private pension? An illiterate 16 year old single mother who was never able to get an advice because she was embarrassed that she cannot read? What about a very sick person who had to cope with fantastically complex application forms on his own because the government cut the funding for advice sector to the bone?

 

All these people, thanks to the way "fraud" procedures are set out, would be technically fraudsters. There is hundred of thousands of them. Your poor local paper would go out of business if they had to print even 1% of these names.

 

I am not angry at your question. I just sought to clarify few things for those who are ignorant.