Universal Credit tough on fraud (Revised)

“Universal Credit will reduce fraud and error in the benefits system, Ministers said today (24/02/2012), as new figures confirm the current system is too complex and still open to abuse and error.” Reports The  Information Daily. Please go to our latest news section to read the full article.


Universal Credit promises to be tough on fraud. The recent impact assesment on Universal Credit outlines the following;

The policy intention is to prevent, deter and punish benefit fraud, which costs innocent taxpayers money and undermines public confidence in the welfare system. As part of this the government wants the ability to impose tougher punishments in cases of benefit fraud. This will mean the introduction of a new minimum administrative penalty of £350 for benefit fraud or 50% of the amount overpaid whichever is greater up to a maximum of £2000; increase in the detection rate of the number punished for attempted fraud; extension of the loss of benefit sanction for 1 to 3 strikes which will mean a loss for 13 weeks; 26 weeks and 3 years. Immediate 3 year loss of benefit for serious organised benefit fraud cases. Hardship payments at a reduced rate will be available for vulnerable groups. A new civil penalty of £50 for customers who are negligent in maintaining their benefit claim to encourage personal responsibility.



The emphasis of the impact assessment is clearly outlining fraud, but fraud is not the whole story.  Errors and genuine mistakes also account for a proportion of benefit  claims that are   inaccurate. The public needs  to have confidence in a new benefits system so that trust can be obtained from both sides. Fraud does need to be addressed but  so does the complexity of benefit systems that cause mistakes to be made. What do you think? Are the penalties too tough? Should more assistance be offered to claimants to reduce errors?


  1. Terry Clay says:

    Will the principle of ‘innocent until proven guilty’ apply, or will this be an opportunity for an over-zealous bureaucrat to pull the rug from underneath someone who will already be struggling?

  2. D Lee says:

    I fully support the penalties – this is much fairer for taxpayers and for those who genuinely deserve to have the welfare support. The penalties are a good,cost- and admin-effective deterrent to present/would be fraudsters.

    Of course there will always be an element of mistakes – there always is in any system. These can be corrected with processes set in place to ensure that the claimants involved are not unduly penalised.

    We need to see things in perspective though. At the moment, public trust is impaired because we’ve seen so many examples of people abusing the benefits system (including people we may know within the community that we live in) that it is far more critical and impactful to address the abuse and safeguard public coffers than to worry about how the penalties will impact a small number of genuine claimant mistakes.

    • Thanks for commenting D, excellent points raised.

      • netty says:

        I agree that fraud within any system has to be tackled, but it always seems to be that Benefits fraud is highlighted rather than other forms of fraud eg tax evasion and expenses claims which are usually carried out by people already in the money. I admit there are some people who commit fraud out of greed, but these are in the minority, the vast majority of people committing the fraud simply to put a bag of shopping on the table or provide heating. The sanctions for benefit fraud are already harsh with many people getting custodial sentences where other more serious crimes (sexual and violent offences ) can attract community sentences. This is no surprise because the interests of money has always been put above the welfare of people in the criminal justice system. Putting people in prison for this makes no sense as it costs the state even more money and community sentences would, at least, mean that people were giving back to the community in some way. Also, it is rarely remembered that when benefit fraud is discovered, the claimant always has to pay the money back. It is ironic that it is not highlighted about the many benefits that people are genuinely entitled to go unclaimed – why are these figures never highlighted with such vigour?. With regards to your point on the mistakes of the benefit agency, it it little wonder because the forms and rules for claiming are so very complicated and even experts in the field can become confused. I welcome the streamlining of benefits, but I do not believe that it is to simplify things for the claimant, but to save money. No doubt this move will see many workers within the DWP losing their jobs as a result of this change. The truth is that the vast majority of claimants are genuine and make honest mistakes, and the DWP also make many mistakes. The time and effort of sorting things out with the DWP is an absolute nightmare in time and effort. I have seen time and time again (even where the mistake has been the fault of the benefits agency) claimants having their benefit stopped (for many weeks). The claimants word is not believed and they almost always have to get professionals to sort it out. I fear for the vulnerable and marginalised members of the community who may not have the capacity to deal with these matters and as a result are living on fresh air. It is little wonder that many people who have lost their jobs due to no fault of their own (but largely the fault of bankers and the government) and have paid tax and national insurance for many years find themselves living on a pittance. With the best intentions it is simply not possible to live in these present times of high prices on benefit payments. I myself receive only £67.40 week (plus HB and CTB) which I have to run a home on. £34 week is deducted directly for arrears of water, electricity and gas, leaving me with £33.50 from which I also have to pay television licence, telephone and overdraft charges. There is very little left to spend on food, clothing, travel, postage and sundries. Socialising is out of the question, so many people find themselves isolated at home because they do not have the income to participate in anything. I myself am a victim of the recession having lost my job. I am a highly qualified professional but there is no work out there for me. Whilst I would not commit benefit fraud, I can see how people are tempted or forced to do so simply just to survive. Demonising such people is not helpful and the proposed penalties are drachonian and will only serve to lead to an increase in crime and homelessness if benefits are stopped. By all means make the claimant pay the money back and where productive prosecute and encourage community sentences. Most people do not want to commit fraud and end up with a criminal conviction (this would make it even more difficult for them to get a job). It would be great idea to highlight some of the many hundreds of thousands of cases of extreme poverty under the benefits system but this does not serve the interests of the media and the hard liners. I cannot believe that anyone who lives on benefits would say it is generous – on the contrary, it is dire poverty. If things aren’t bad enough there are proposals to reduce housing benefit where the claimant lives in an underoccupied property. For me, this would mean a loss of 15% of my HB which I would have to pay for out of my benefits. How and with what? Again, this will lead to homelessness, sickness and increased crime. It would not be so bad if there was a choice through the availability of proper jobs. In my area, there 7,000 jobs available, but out of this there are only 2 full time jobs. Many of the jobs are 4 hours here and there (with no guarantee of anything on a weekly basis) in call centres and care work. No-one in benefits who runs a home can do this. A friend of mone beat off more than 3000 applicants to become a grave digger. So by all means, the government should tackle fraud, but it should also be realistic about the causes and establish policies which provide for the growth of our economy and increased jobs ( I cannot see for the life of me how they are doing anything about this). So fire ahead Mr Cameron and Nick Clegg with your drachonian plans and you will see a divided country with many angry people. Not even under Mrs Thatcher did I feel so very little hope for the future. I hope that those people who have found themselves in this dire situation through no fault of their own remember these hard times when the next election comes round.

  3. steve moorcroft says:

    There would be less fraud if people claiming benefits were given a decent amount to live on, instead, they often have to choose between eating or heating. some who are ill and at times housebound, are forced to cope in winter time, with no heating, staying wrapped up in blankets to keep warm in their homes. the effects of this is to worsen their health and make them less able to work. as usual its the poor that get the blame when most fraud goes on in the city, and by rich tax evaders etc.

  4. I assume that civil penalties will be challenged via the Appeals Process. To my mind that will be fairer than the current system. Too many people are cajoled in to accepting fines and penalties rather than appear in the magistrates courts. When they do appear again the often do not have legal advice and plead guilty. It is a mockery of a system. At least with civil penalties there is a chance of a fair hearing. Ironically I have also found the level of proof is stronger at a tribunal than at Magistrates.

  5. Terry Clay says:

    I was not objecting to the penalties per se, in fact they could be greater in my view PROVIDING they are only applied AFTER due process including the opportunity to appeal has been exhausted rather than by the decision of a single individual who may have attitudes as cavalier about human rights as Mr D Lee above.

  6. Ros Man says:

    In reply to Malcolm Gardner and Terry Clay the answer is no. the administrative penalty will be applied as now before any tribunal appeal is heard. This is the current procedure. DWP will also prosecute before any appeal is heard on the basis that if found guilty in a court of law, where there is a higher evidence requirement, then any tribunal appeal would fail. The courts are based on Beyond Reasonable doubt, where as a Tribunal requirement is only balance of probability.

  7. John Fleming says:

    Malcolm, as you know I deal with the issue of sanctions to ‘benefit fraudsters’ and I have to say that I do not and never have cajoled anyone into accepting anything. We were adversaries at an IRRV Conference many years ago, the subject being ‘Tougher Sentences for Benefit Fraudsters’ at that time I was in favour, but I have to say, on a personal level, that I find the whole situation a complete and utter waste of time. The government have complicated the whole thing beyond belief with Cautions disappearing and changes in Administration Penalties, who the heck will want to accept a penalty of 50% of the amount deemed to be ‘Fraudulent’? If you were successfully prosecuted there is no way that any fine would be the minimum amount of £350 that the penalty attracts, maybe that means more people refusing the penalty will mean more in court, then the figures for prosecution increase, its seen as a problem and ‘Sentencing Guidelines for Magistrates’ change the starting point for custody and more people end up in HMP! Not only are people punished though, they then risk the loss of benefit for specified periods, its stupid, most of these people live on low income, how wll they survive? I would have though a more sensible approach would be:
    1. Chanrge interest on the fraudulent overpayment.
    2. Set Community Orders as the norm, say a starting point of £5,000 fraud equates to 300 hours of unpaid work in the community, that being a ‘Guilty Plea’ at the earilest opportunity.
    3. Only prison for serious cases of dishonesty, multiple claims, includes I.D. theft, etc.
    4. Issue penalty notices for overpayments under say £2,000, amounting to 10% of the total and have interest to at bank base rate.

    As to Ros Man’s comment on sanctions prior to appeal, all of the cases that I deal with are adjourned pending the outcome of any appeal, whether the appeal is against my employers decision or DWP and they have no issue with this. As I have explained to a number of people in open court and privately, if the amount of loss due to benefit fraud is not conclusive then it would be incorrect for a judge or magistrate to set the level of penalty based on the figures that are available, for example the Appeal maybe successful with the overpayment being considerably reduced or even quashed completely, it could mean that there are no offences to answer or a different sanction may apply, indeed someone could find themselves behind bars and then the appeal succeeds what then or do we take the view that as the defendant is guilty the overpayment must be right? In my opinion the defendant should be given the ‘benefit of the doubt’ and the appeal dealt with by fast track, so that the defendant’s Human Right to swift justice is not infringed.

    My personal opinion is that the idea of UC is good, putting into practice I’mnot so sure!


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