Have i committed fraud???? Please help...

[shell7t8]

Hi folks,

I hope someone can help...

 

I have worked part time for the last 10 years, never claimed any benefits other than some working tax credit (8 year old daughter).

 

2 years ago my partner was diagnosed with terminal cancer. We struggled for a year with 5 operations, hospital stays, gruelling chemotherapy and consultants appts. Finally in august of last year the pressure built up and i took a career break from work. I can take up to 5 years. Although i was not working or earning we were told by dwp that we were not allowed any benefits other than dla for my partner and carers alllowance for me. Things were tough but we had some savings and managed ok. In november our macmillan nurse told us although we may not be entitled to income support we should get council tax benefit and we submitted an application. After submitting a letter from my work confirming i wasnt earning anything, benefit was granted and we didnt have to pay any more council tax.

 

In june we were struggling financially and although couldnt physically go out to work we wanted to do something so we set up our own company which we limited to negate any financial risk, my partner did this to protect my daughter and i incase the inevitable happened to him and we werre left alone. Weve not been taking anything from the business but our accountant told us that we should "pay" outselves our taxable allowance as this was what we could earn from our business tax free. I was worried about "paying" ourselves this and when renewing my tax credits award i told them we were both down as working even though most weeks we dont physically have the money as such. Today we had a letter from the council saying that since we advised them in november that i was on a career break theyve not heard anything from us (why would they if im career break for 5 years) and that they have reason to believe i have restarted my old job or started a new job. I am assuming that the tax credits people fed this info to them.

 

Im not worried at all about not being entitled to council tax benefit anymore, if earning this money means we arent entitled then fair enough but im worried that they will think ive committed some kind of fraud and that ill go to prison!!!!! Would this happen in these circumstances? We have not had housing benefit or income support only council tax benefit and only since last november.

 

Could anyone offer any advice?

 

In the letter it says our benefit is suspended until we provide information relating to my job (no mention of partners job), provide a p45, employment contract, wage slips, 4 months bank statements etc etc. it says at the bottom, if we no longer want to proceed with the claim to contact them but if we do that surely that will look a bit suspicious!!!

 

Id be really grateful for any advice

 

Shell

[shell7t8]

Please is anyone able to help????

[estellyn]

If you've received income and not declared it then, yes that would be fraud - whether or not you're prosecuted would depend on the amount of overpayment and other factors. If you haven't received any income then it isn't fraud - but I'm not sure of the rules regarding ltd companies and how profits are treated.

 

Your best option is to come completely clean with the council about everything. While self employed the council will want to regularly check to see what your income is anyway.

[Benefits Bod]

Merely failing to notify a change of circumstances is not necessarily fraud in itself. The legalese is looked at first, then the substance of the case at the end. This is a long long post so coffee is probably a good bet....

 

Legalese:

 

Firstly, was there a duty to notify the change? Under the law as it currently stands, the duty generally extends to changes that the claimant (and/or payee if different) might reasonably be expected to know might affect benefit. That test must be applied on a person by person basis. If a claimant can show s/he could NOT be reasonably expected to know a relevant change might affect benefit, or if s/he can show a genuine belief that the change didn't affect benefit (even if it did), there is no duty to notify the change. It should be noted that even if a claimant can meet this test, an overpayment could still be lawfully recoverable under benefits legislation.

 

Obviously, the local authority could respond by pointing out that a claimant knows s/he is on a means tested benefit and therefore it is indeed reasonable for that claimant to be expected to know a change in income might affect benefit. But, the point is, it isn't just a case of "failing to notify a change = fraud".

 

Secondly, even if there is a breach of the duty to notify a change of circumstances, that still doesn't mean a criminal act has occurred. Usually, but not always, the offences for failing to notify changes in circumstances are prosecuted under either section 111A or section 112 of the Social Security Administration Act 1992. Sometimes, prosecutions are sought under The Fraud Act 2006 and, less frequently, The Theft Act.

 

In (VERY) broad terms, where a change of circumstances has not been notified, an offence is committed if:

 

- there was such a change; and

- there was a duty to notify that change; and

- there was a failure to notify that change; and

- the change is one that affects entitlement [this point is often overlooked, but is fundamental]; and

- the failure to notify the change was either dishonest (s.111A) or done knowingly (s.112).

 

It cannot be stressed enough that the above depends on all the facts and the content of this post must absolutely not be taken as covering all situations in relation to allegations of benefit fraud. For example, this post does not cover a situation where there was a misrepresentation of, or failure to disclose, a relevant fact at the outset of making a claim.

 

 

Substance:

 

Based on the info given by the OP, I'm far from convinced there is anything fraudulent about the situation. However, one point in particular needs clarifying.

 

In the post, it is stated "Weve not been taking anything from the business..." but then goes on to say the company is paying you (and/or your partner) based on your accountant's advice. Simple question: Has any money been paid to you (or your partner) by the company? If the process is merely for accounting purposes and no money actually changes hands, then there is plainly no income.

 

If the true situation is that no money has actually changed hands between you/your partner as individuals and "the company", my advice is to to get confirmation of that from your accountant and notify the local authority very straight forwardly that this is the case. In the letter to the authority, expressly state it is your honest belief you were, and continue to be, entitled to benefit. In turn, request that benefit is reinstated promptly or, in the alternative, request the Council makes a formal decision in order that you can exercise your lawful right to appeal to the First-tier Tribunal. Note, if you have informed tax credits you are working when you are not, there may well be an issue with HMRC. However, the local authority does not have jurisdiction of tax credits although info may well be exchanged between the two bodies. One other point which may or may not be relevant: a local authority cannot ask for evidence not in existence - there is clear legal authority on that point.

 

Whatever the truth, my firm advice is not to attend any interview under caution (IUC) - there is no legal basis on which you can be required to attend, despite the DWP and local authorities often implying the contrary. If you do attend, my firm advice is to "no comment" EVERY question, including the most benign such as "Can you confirm "X" is your date of birth?". My advice about IUCs is because the ONLY person(s) that can intervene on your behalf is a lawyer. You are allowed to take friends, you are allowed to take specialist welfare rights workers but none of those can speak - only a lawyer can. Even with a lawyer, my advice would be (usually) to "no comment" and only offer a prepared statement.

 

IF you are prosecuted, make absolutely sure you do the following:

 

1) In any event, appeal to a Tribunal (don't ignore the time limits!) irrespective of any other legal processes that may be underway. This is not "instead" of any defense of criminal proceedings; this is an absolute "as well as". Any solicitor who fails to advise you of this, or says it isn't necessary should be avoided. The difficulty is that finding a solicitor with knowledge of social security law is not easy, so, see "2" below.

 

2) Irrespective of how knowledgable or otherwise s/he seems, insist your solicitor seeks the services of an expert witness familiar with social security law. Relying on an accountant to simply tot up any overpayment calculation is a complete waste of time but is very lucrative for the accountant. An expert witness (in social seciurity law) will be able to see if the local authority has followed the law relating to the decision relating to any alleged overpayment - an accountant won't have a clue.

 

I hope that all the above at least helps to point you in the right direction. For personal reasons, I may not be able to respond promptly, or at all, to any further posts on this thread.

 

NB: Just noticed something. If you / your partner are employees of a "company", you are not self-employed and the local authority should not be attempting to treat you as such.

Edited August 11, 2012 by Benefits Bod
typos