Government underpays families by £1.8billon, but where do you stand?

Over the past year, a lot of changes have been made to the legislation surrounding the UK benefits system, as the government aims to reform the processes in place, and simplify the current system by bringing in Universal Credits. We have written blog posts before about how these changes affect you, but today, we’d like to talk you through the recent reports that the government is responsible for incorrect welfare payments, which has resulted in £1.8billion being underpaid to families.

We receive dozens of queries each day about benefits claims from people across the UK. Many of those are about suspected overpayments, but given this news, we’d like to cut through the media jargon and tell you exactly what these underpayments could mean to you.

What are the reports?

Over the past couple of weeks, despite news of constant government plans to reform and to improve the staggering inaccuracies that plague their systems, it was announced that state auditors have voiced deep concerns over current standards in welfare payments.

According to reports, Comptroller and Auditor General Sir Amyas Morse, Head of the National Audit Office, announced how billions of pounds is either overpaid or underpaid due to fraud and error. He added that the Department for Work and Pensions estimate that £3.1billion (around 1.8% of the total budget) was overpaid due to claimant fraud, while mistakes by claimants and officials in 2015-16 showed that “a step change and sustained reduction in fraud and error has not been realised”.

As a result of these findings, the government has been urged to renew their efforts to get these payments under control, as state auditors have once again refused to give benefit accounts a clean bill of health, stating that the levels of wrong payments are “unacceptably high”. Of course, while it’s agreed that radical change is needed, it’s unlikely that this will happen anytime soon, given how Britain is in the midst of a leadership change, as well as looking ahead to one of the biggest changes in decades as it moves onwards with leaving the EU.

What kind of fraud currently exists?

It’s difficult to determine the sources of such fraudulent cases, which is why if you apply for benefits or have an ongoing claim, you may be familiar with how stringent their processes are. Experts such as Harry Davis, Campaign Manager at the TaxPayers’ Alliance, have supported the need for change, as he told the press: “The welfare system remains dogged by complexity and we can see that the authorities are still losing significant sums of taxpayers’ money as a consequence.

“When people cheat the system, they’re not just taking from taxpayers, but also taking from the neediest in society. After years of reform, it cannot be right that the amount of fraud is increasing, so there can be no room for complacency when ministers still have so much more to do.”

But who exactly are these fraudsters, and why is it affecting the system so heavily? One recent example comes from a mother of 12 living in Lamerton near Tavistock, Devon; Melanie Edwards, 40, managed to fraudulently claimed more than £150,000 in benefits, by pretending to be single.

Edwards told authorities that she was living alone with her 12 children, when in fact she was still living with her husband Brian. During her trial, Edwards, admitted three counts of benefit fraud by failing to disclose she was living with her working husband between 2009 and 2014. Before her lies were discovered, she had received £144,113 in tax credits, £9,606 in housing benefits and £988.47 council tax relief.

It’s for cases such as these that reform is so desperately needed, and why authorities seem to be ever-tightening their grip on families who do nothing other than report their circumstances with honesty. This is why seeking the help of a legal professional can make all the difference, as they can work with you to remove the jargon and support your case.

Who is it affecting?

At Hylton-Potts, we have seen all too often how it is the neediest of families that fall on harder times due to government blunders. For example, with regard to this recent £1.8billion underpayment figure, one must consider what this means for families with disability claims. It has certainly highlighted the fact that a worrying number of disabled people are missing out on hundreds of millions of pounds of support every year.

Beth Grossman, Head of Policy at Disability charity, Scope, told the press how extra costs payments are a financial lifeline for disabled people. Cutting these or underpaying them due to error can make it extremely hard for disabled people to pay the bills. She claimed: “We have to make sure that this crucial support goes to the disabled people who need it.”

The other side to this argument is of course, how are those gaps in benefits being bridged? A recent article in the Guardian answered this very question, by uncovering the disturbing fact that local UK authorities spent almost £100million last year making up the rents of families affected by the bedroom tax and benefit cap.

According to recent figures, over £14million was spent helping renters whose finances had suffered as a result of the £500-a-week benefit cap. On top of that, £83.5million was spent making up the rents of people whose benefits had been cut by “the removal of the spare room subsidy”.

Discretionary Housing Payments allow local authorities to help housing benefit claimants who face difficulty in meeting their housing costs, and in England alone, 140 councils spent all of or more than their entire DHP allocation.

However, while DHP helps to ease the pain for many people in need, critics have been eager to give their opinion of them as a mere “sticking plaster that barely holds together a creaking welfare system”. Campbell Robb, Chief Executive of housing charity Shelter, said: “The fact that so many councils are seeing such high demand for Discretionary Housing Payments shows the huge impact that welfare reforms and our drastic shortage of affordable homes are having.

“Thousands of struggling families have already come to us desperate for help, as they battle against the double blow of sky-high housing costs and cuts to support. We’re doing everything we can to try and help people access the help available, but even then Discretionary Housing Payments only ever put a temporary sticking plaster over the problem.”

Given the seemingly constant changes that the government seems to be making to the system, for better or worse, it can be difficult to get your head around all of the terms and policies. If you’re applying for benefits or tax credits, then the best thing to do is to get in touch with a legal professional as soon as possible.

It is easy to get caught up in all the anxieties expressed in the media, but you don’t know your situation for sure until you speak with someone who can give you straightforward advice for your specific case. That’s why our experts are always on hand to help; you can call us on 020 7381 8111, or via email at [email protected].

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