Benefit fraud - the cost of an expensive minority

Did you know that the Department for Work and Pensions (DWP) handed out £3.4 billion in benefit overpayments in 2013/14?

It is quite shocking that such a large wad of taxpayers’ cash can waltz out of a departmental door in such a haphazard fashion. But don’t worry; the DWP did recover £0.95 billion.

The numbers break down thus: £1.2 billion was due to fraud, £1.5 billion due to claimant error and a lastly there was a tidy £0.7 billion of official error. Clearly the former is a criminal matter, and the minority of benefit claimants who perpetrate it should be caught and duly punished. But the latter two causes are rather more irksome from the perspective of needless wastage.

Claimant error is where the individual doesn’t inform the DWP of a change in circumstances and official error is due to miscalculation either through bad maths or bad information. There was also a total underpayment of £1.5 billion. Fraud and error does not represent a massive proportion when set against the size of the overall bill, but it’s enough that we must re-double efforts to eliminate it.

Here at the TPA we have been waging a War on Waste, and arguing that there needs to be greater simplicity in the welfare system. This would make it more difficult for those that want to defraud the taxpayer and easier for claimants and DWP staff to allocate the correct sums to the right people. This isn’t just a matter of reducing waste but also ensuring that those who have rightful claims find them fulfilled. The benefit system is, and must still be, a safety net for those who fall on hard times – that doesn’t mean, of course, it can become a comfort blanket.

Yet the government has gazumped us.

The introduction of Universal Credit is a welcome step towards a leaner, cleaner welfare system. By rolling six welfare payments into one the government is promoting efficiency as well as allowing the claimants to take responsibility for their own finances. The roll-out has not been smooth, and cash has undoubtedly been wasted, but a recent report suggested increased control and oversight of the program’s introduction should speed up the process. We’ll be watching carefully.

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commented 2014-12-05 05:52:38 +0000 · Flag
Don’t understand how the government can pay MAXIMUS 500 MILLION POUNDS OF TAX PAYERS MONEY TO LOOK AFTER ESA AND PIP assessments over the next five years. Countless tribunals
for people with severe disabilities have cost the country millions. Why waste money like this?
Will the madness ever stop?