TPA: Government loses £3bn in benefits fraud this year

Commenting on the recent publication of the government's estimates of fraud and error levels in the benefit system in 2018-19, Duncan Simpson, Research Director of the TaxPayers' Alliance said:

With budgets tight and people working hard to make ends meet, government losing £3 billion of our money through overpayments of benefits is a real slap in the face for taxpayers.

The principle behind Universal Credit makes sense: it simplifies the welfare system and can eventually limit these kind of errors. But with overpayments increasing for the fourth year in a row, DWP needs to get a grip and stop this happening again.

This could have paid for:

  • A £500 increase in the personal allowance in 2020-21 to £13,000, or
  • A 2 percentage point cut in class 4 national insurance main rates for the self-employed, lasting 3 years

The Department for Work and Pensions data shows:

  • 2.2 per cent of total benefit expenditure was overpaid due to fraud and error
  • The estimated value of overpayments was £4.1 billion
  • The net government loss, after recoveries, was £3.0 billion, or 1.6 per cent of benefit expenditure
  • 1.1 per cent of total benefit expenditure (or £2.0 billion) was underpaid due to fraud and error

TPA spokesmen are available for live and pre-recorded broadcast interviews via 07795 084 113 (no texts)

Media contact:

Chloe Westley

Campaign Manager, TaxPayers' Alliance

chloe.westley@taxpayersalliance.com

24-hour media hotline: 07795 084 113 (no texts)

Notes to editors:

  1. Founded in 2004 by Matthew Elliott and Andrew Allum, and now with 80,000 supporters, the TaxPayers’ Alliance (TPA) fights to reform taxes, reduce spending and protect taxpayers. Find out more about the TaxPayers' Alliance at www.taxpayersalliance.com.
  2. TaxPayers' Alliance's advisory council.

Personal allowance and National Insurance calculations are derived from HMRC's Direct effects of illustrative tax changes.