Record levels of benefit fraud in the UK

UK - Record levels of benefit fraud

Fraud levels in England, Wales and Scotland reached a historic high, with universal credit fraud up five percentage points to nearly 13%, denting ministerial expectations that the scheme would deliver an annual £1.3bn reduction in benefit fraud by 2025.

Universal credit accounted for £6bn of the estimated £8.5bn of “overpaid” benefits in 2020-21, the figures show. Fraud levels soared as normal verification checks were suspended in order to process the new benefit claims last spring.

The Department for Work and Pensions (DWP) said benefits fraud remained relatively low, and blamed the increase on a tiny minority of claimants. It said 95% of the annual £200bn pensions and benefits bill was going to people genuinely in need.

The department had flagged up about one in six claims approved over the past year which it considered suspicious and was now retrospectively checking them.

The DWP said it had thwarted a targeted attack on the benefits system by organised criminals at the height of the coronavirus pandemic. It also claimed to have prevented £1.7bn from being paid to people trying to scam the system.

There are 6 million people on universal credit, half of whom started claiming after March 2020, when the first lockdown was announced. About £38bn was paid to low-paid and unemployed households last year, up from £18bn in 2019-20. An estimated 300,000 universal credit applications were rejected last year.

The main areas of universal credit fraud were misstatements of household savings or income, overstating the amount paid in rent or numbers of children in a family, and couples cohabiting while maintaining individual claims for separate addresses.

It is expected that after the extended verification, those who claim benefits they are not entitled to will face criminal prosecution.

- 13 May 2021 - fraud investigation