You say: Benefit Fraud (Losses)? I say: (Repaid) Benefit Overpayments and Errors!


If you have been following the UK political scene lately, probably the last place you’d expect to see calls for tougher clamp-downs on benefit fraud losses coming from is the Labour Party. Strangely enough, that’s exactly what happened this week, as Emily Thornberry, Shadow Minister of State for Employment, tore into Iain Duncan Smith (Minister for Work and Pensions) over the Tory government’s poor showing in the benefit fraud loss recovery arena.

This is not the first time Ms Thornberry has caused a stir for the Labour Party. Almost a year to the day, she was involved in a tweeting scandal that ended with Ed Miliband requesting her resignation. On that occasion she was accused of “snobbery”, after posting an image of a house in Rochester that was adorned with St George Cross flags.

It’s not easy to understand what all the fuss was about, as it was a benign image and was not accompanied by any critical text caption, yet it seems that some people construed it as a message that working class people were not English enough to be flying the flag, or something like that, which Emily Thornberry denies was her intention. The incident even led to a new political term being created: the “Thornberry Reaction”.

With so many high quality angles of attack available on the benefit fraud issue, it is amazing she chose the one that provided maximum scope for opponents and the media to point out that Labour’s performance in this particular arena was no more impressive than that of the Tories.

Emily Thornberry has provided the world with at least two very important lessons. The first is that when tweeting a photo, it is best not to leave it up to the readers to interpret the meaning of the picture, because it seems almost inevitable that they’ll draw the wrong conclusions. The second lesson is that it doesn’t seem to matter very much who is in power, none of them appear capable of finding a reasonable, effective, and humane solution to the benefit fraud problem.

The benefit fraud situation in the UK

Benefit fraud losses are currently estimated at approximately £1.3 billion, and despite massive crackdowns and counter-fraud investigations, there does not seem to have been much impact on the bottom line so far. In fact, there is good reason to be concerned the government may be burning more money than it is recovering, because maintaining all these counter-fraud services is very expensive.

We must also consider that there are other much more serious crimes taking place, such as tax evasion, that are costing the government far more in lost revenue than the damage done by benefit fraud.

But there are four important points on the benefit fraud issue that must not be overlooked:

  • Only a fraction of the losses often attributed to benefit fraud are actually due to fraudulent action on the part of those who are accused. In fact about 66% of overpayments are due to error, and have no link to fraud.
  • Very little (if anything at all) is mentioned of the £1.5 billion that is underpaid to claimants due to error.
  • Many of the overpayments are paid back, and therefore technically are not “lost”.
  • The group most heavily targeted by politicians and the media as scapegoats for blame – the unemployed – account for only 4.3% (or approximately £210 million) of all money overpaid (and remember, it is not always due to fraud).
  • Not everyone accused of benefit fraud and subsequently sanctioned or subjected to other penalties is actually guilty. Many do not know what to do when accused of such a serious crime, or they may be persuaded they are guilty when they are not, and certainly very many feel powerless to fight against the accusations.

For those afraid to fight the system due to high cost, the very welcome news will be that there are services such as Hytlon-Potts that can help on a simple low cost basis with fixed fees. Unfortunately not everyone who could be getting this help is aware of the options, so if you know of anyone who is being put through the wringer by the system, please let them know about our service. It could make a huge difference to the outcome for them.

More information and statistics related to benefit revenue losses can be obtained from this PDF report published by the UK government in 2014.

Unfair image of “benefit cheats” creates stigma and fear for no reason

The stereotypical benefit cheat as depicted by the media is almost a non-entity. Less than one in a thousand benefit fraud cheats are living it up in luxury in some foreign tropical paradise at your expense. The far more likely scenario is that Uncle Frank forgot to take his memory pills again and ended up taking the bus to Brighton instead of lodging his form at the DWP office.

When this is the case, it should be a simple matter of just going to DWP or HMRC with Uncle Frank and explaining what happened and then trusting that they will do the right thing once the air has been cleared, but the reality is typically very different.

Instead, the government has a policy of assuming that everyone should be treated as though they are guilty of fraud unless they are able to prove their excuse is genuine (this is known as “Napoleonic justice”, and the opposite of how law is supposed to work in the UK). As you may know, it is not always easy to prove innocence because evidence of innocence is not always easy to come by.

In the example of Uncle Frank, the best he’d be able to do is perhaps obtain a letter from his doctor to explain his dependency on medication and the difficulties that can arise if he doesn’t take the medicine. Even with this information, whether he gets justice or not would depend heavily on the personality of the person who interviewed him.

The point is that the system, as it stands now, is not entirely fair. Perhaps it could even be said that it is not fair at all. When survival is at stake, the fact that a decision can be in the hands of a single individual, with no immediate recourse, is unconscionable.

Of course some people can survive a limited period of sanctions, especially with the assistance of charities (which are bearing the brunt of hard-line austerity as never before). But there are some people who are frail, elderly, or suffering from psychological conditions, and will simply perish if their funds are cut off.

I am not exaggerating in any way here, because this has already happened for more than 10,000 persons in the past year alone, many of them disabled people who were forced into work after being improperly declared “fit”.

Responsibility for these deaths can largely be attributed to media reports that create an unrealistic image of the benefit fraud situation and the people who are accused of benefit fraud. Think about it for a moment. Do we really want a system were over 10,000 people with disabilities, parents with young children, and the elderly can be put out in the cold to perish purely on the whim of one official?

Our public services sector is in critical condition, and it is clear that whoever will be in power next must address the problems and fix them in a much smarter fashion than has been the case up to now. Anyone who finds themselves on the wrong side of a benefit fraud inquiry has genuine reason to be concerned. And because it is a serious accusation with potentially serious consequences, you should seek legal help immediately before making any contact with the authorities.

Hylton-Potts has extensive experience in resolving benefit fraud cases, and we can help you avoid serious trouble if you come to us early enough. Our affordable services are provided on a fixed fee basis, and are a much better option than trying to solve the problem alone or ignoring it. We are on your side and we want to help. For information, call us on 020 7381 8111 or send an email to [email protected].

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