Welfare Cheats, or Victims? The Benefit Fraud Misconception

It’s no secret that many journalists have willingly hopped into bed with the government to help with the scare-mongering campaign against “benefit fraud”. I’m speaking in metaphor, of course, but it is not entirely beyond the bounds of possibility that it has taken place in a more literal sense!

But let’s leave the juicy scandals, gossip and innuendo for the tabloid pages where they belong. The subject of this article is the bizarre image of the so-called “welfare cheat”, which is largely a political construct, far removed from reality.

That is not to say there are no corruptions going on; of course there are many people who deliberately defraud the system and everyone is a little worse off because of it, even themselves. Imagine living every moment in anticipation of your actions catching up with you!

Whatever small gains you may make in the short term, it is never worth what you are risking if you decide to deliberately commit an egregious act of fraud against the benefits system.

The Monster Myth

That is what is entirely wrong with the media campaign attempting to create an image of heartless monsters roaming the streets, shamelessly gorging themselves on the life energy of innocent taxpayers. It’s wrong because, like all monster stories, it is a myth.

At the heart of the problem is a really big amount of money that is being “lost” by the government every year due to fraud and error. The money, of course, isn’t really lost unless it is taken abroad, because if it stays in the UK it will circulate around and stimulate the economy, contributing to VAT, helping to keep people in employment, and so on.

As we have shown in a previous post on this blog in the past, the actual numbers that come out after you painstakingly crunch them do not support the monster myth one iota.

The way the media portrays it is that there is no difference between an elderly pensioner who “defrauds” the government out of £200 because she accidentally ticked the wrong box on a form, and a Nigerian scammer who fleeces millions from unsuspecting victims with a fake money order scheme.

The image they cook up is of young playboys partying in Ibiza with their tens of thousands in ill-gotten gains but the government’s own statistics show that less than 3% of overpayments are for amounts above £5000, and over two thirds of all overpayments are less than £1000.

Just who is scamming who here?

Still, even if a lot of individual people are perpetrating small frauds, it is a big problem because it is contributing to that £1.2 billion figure, right? Actually, no it is not right! Why? Because that £1.2 billion could almost be labelled a fraud in its own right.

What is being said of the £488 million that was underpaid to families that rightfully should have been awarded? Somehow in the weasel words of journalism and politics, this is not deducted from the overpayments balance, when rightfully it should be, unless the government is making good on all the deficits.

Even if they are, there is still the matter of £159 million in terminated awards that should be deducted, because these are only classed as overpayments because the individuals failed to report on time, and the awards were automatically terminated as a result. If it is not clear why these amounts should not be included, it is because technically there is no evidence that the money was overpaid.

It is classed as overpaid because the claimant has not filed their claim correctly, and so the government doesn’t know whether the final payment a person received was legitimate, and therefore considers that payment (and only that payment) to be illegitimate by default.

The data is skewed because many people who have their benefit terminated for this reason are not aware that they can challenge the decision, and many of those who are still in need of benefits simply go and reapply from the start. This means that even though they demonstrate that they were entitled to the amount that was “overpaid”, it is not recorded in the system in that way.

The data also does not include amounts that are voluntarily repaid, amounts that are ordered to be repaid by the courts, or money that is recovered in any other way.

So it is misleading to say that £1.2 billion is being lost, and very misleading to say that it is entirely down to fraud. To the credit of the journalists, they often add a little mention that it’s not always fraud, but usually only after a cascading series of emotional statements framing what a terrible disaster it is for the nation.

As an example, see this article from the Daily Mail, which is just thoroughly loaded.

Mysterious Organisation is Main Witness

News stories are only as credible as their sources, and one of the key sources quoted in the Daily Mail article I linked to above is the Taxpayer’s Alliance.

You may be wondering who these people are and where their money comes from and that’s a good question, because they’re not telling. Terence Eden published a brilliant exposé on this topic, but they still seem to have retained their cloak of mystery.

Does this secretive organisation that claims to speak on your behalf – if you’re a taxpayer, at least – have any credibility? Or is it another agent of bias? Well, if we look to the statistics published by The Guardian, it seems to be the latter.

As Robert Booth reported in 2009, The Daily Mail used quotes from the Taxpayer’s Alliance 517 times, and the Sun quoted them 307 times. The Guardian, by contrast, mentioned the group only 29 times, and not simply in the form of quoting TPA propaganda.

There are many reasons to be concerned about a secretive organisation with a misleading name that indicates it speaks on behalf of all British taxpayers.

You should be even more concerned when the media supports this organisation and feeds quotes from it into their articles to try and brainwash you into believing myths about serious political and economic issues.

In my view, if you are going to call your organisation “The Taxpayer’s Alliance”, you should at least have the courtesy to indicate which specific taxpayers, lest people are unfortunately misled into thinking that you represent all taxpayers.

In Reality, Benefit Fraud is Rare

Of the more than £30 billion paid out in benefits, the amount lost due to overpayments is very small (and offset to some extent by the massive amount of underpayments). Of the few overpayments, the vast majority are for very small sums. Hardly any of them are due to fraud, and of those found guilty of fraud, we believe that vast majority are actually innocent victims of the system.

Even the relatively small number of people who are actually guilty are not criminal masterminds, and often it is a case of not realising the seriousness of their actions. They may reason that the amount they are “borrowing” to meet some urgent short term need can easily be paid back later. People in this situation, victims of our dreadful poverty crisis, are further victimised when they are caught, in the name of creating a deterrent.

We believe that many of those who are actually caught and convicted for fraud may actually be innocent. They may be convinced that it is in their best interest to not fight the prosecution. They may even be led to believe they are guilty of an offence, when in fact they are not.

There have even been cases where the fraud investigators have tampered with evidence and falsified statements to frame people. The big question that arises is, when somebody is caught for this kind of perversion of justice, why are they not punished to the full extent of the law?

Why is there one standard of punishment for those who commit fraud against the government, but a different standard of punishment for those who commit fraud on behalf of the government? And how many other people have been convicted on the basis of similarly tainted evidence?

It does not seem to be a safe assumption that there would not be other investigators who have stepped over the line, or that this investigator only did the wrong thing on the cases he was caught out on. The much safer assumption is precisely the opposite.

Too Easy to Make Mistakes

The system is very complicated and there is an unfair assumption that everyone can figure it out by himself or herself. There are forms to be filled in with questions that could be interpreted in different ways.

The individual person filling in the form may have difficulties with literacy or with their eyesight, or may simply not understand that complex bureaucratic language that government forms tend to be written in.

People are also not machines. They may simply forget that they are supposed to report on a specific date, or they may have other reasons that prevent them from meeting a specific obligation at a specific time. These are not incidents of fraud, however, and should not be treated that way.

You Don’t Have to be a Victim of This Outrageous System

Here at Hylton-Potts, we hate to see people being bullied by fraud investigators over small amounts of money, when all they may be guilty of is a simple mistake that the system itself may have contributed to.

Our legal consulting firm is an expert in clearing up the confusion that leads to people being incorrectly made victims of the system. We can help clear your name and reduce the damage you suffer as a result of eager-beaver fraud investigators trying to make a name for themselves.

The moment somebody accuses you of fraud, you must cease all communication with them, and contact us immediately on 020 7381 8111 or send an email to [email protected]. We will handle the matter for you and make sure that your rights are respected.

We would be interested in your comments, please leave them below this blog post.