DWP may soon be able to gather information from banks and airlines about where claimants are traveling to and for how long as part of a tougher effort to stamp out benefit fraud. This is part of a new set of powers which has been proposed by officials.
Figures published in May showed benefit fraud totalled £6.4 billion in the 2022-2023 fiscal year ending in April, down from a record £6.5 billion the previous year. This is a major problem, since fraud instruction manuals are available online. According to statistics, most of the crimes involved Universal Credit claims.
BirminghamLive wrote that, within a report on Fighting Fraud in the Welfare System, the DWP said its current information-gathering powers were first put in place decades ago. The government department claims these measures need updating because they are no longer flexible enough to tackle the types of fraud seen today.
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It said: "Some of the key legislation DWP relies on is now over 20 years old. We plan to modernise and strengthen our powers. Subject to parliamentary time, we will legislate for new powers to help our officers investigate potential fraud and apply new penalties to punish fraudsters."
The newly published results of a survey on fraud, error and debt in the welfare system found that just under a third (31 per cent) of people thought most incorrect benefit claims were the result of dishonesty. Just under two-thirds (62 per cent) thought fraud and error was a big problem and more than half (56 per cent) thought the Government was not doing enough about it. In addition, 59 per cent think benefits cheats don't get caught.
The research was completed by 2,127 people between June 15 and 21, 2023, with 618 of them on benefits, which meant they were claiming at least one of the following: Universal Credit, Jobseeker's Allowance, Income Support, Employment and Support Allowance, Pension Credit, Carer's Allowance, Attendance Allowance, Personal Independence Payment or Disability Living Allowance. It also included responses to an array of new measures designed to stop those who are defrauding the system.
What are the six new potential DWP powers against fraud?
- Government organisations sharing data with DWP about claimants: 70 per cent found it acceptable, 58 per cent of claimants found it acceptable
- Asking banks to share information about accounts with suspected fraud: 64 per cent found it acceptable, 51 per cent of claimants found it acceptable
- Collecting banking information as soon as fraud is suspected, rather than waiting for a criminal investigation: 60 per cent found it acceptable, 47 per cent of claimants found it acceptable
- Trained DWP investigators having search and seizure powers: 59 per cent found it acceptable, 44 per cent of claimants found it acceptable
- Collecting information about where claimants are spending money: 52 per cent found it acceptable, 37 per cent of claimants found it acceptable
- Trained DWP investigators having arrest powers: 51 per cent found it acceptable, 39 per cent of claimants found it acceptable
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The survey found that two of the potential new powers were seen as "completely unacceptable" by more than 10 per cent of the overall number who took part. These were the power to make arrests along with the power to collect information when it was explained using the example of contacting an airline to see where a claimant is going and how long for.
People on Universal Credit are allowed to go abroad for up to a month and should tell the DWP of their travel plans. If a claimant is in an intensive work search group, they are expected to spend 35 to 37 hours a week looking for employment, even while away on holiday.
In the worst-case scenario, they could be asked to fly back to attend a job interview or start work. The rules are also aimed at preventing people from making a benefits claim in the UK and then going back to their home country for months at a time.
DWP analysis shows that the key areas where fraud is highest include:
- misrepresenting earnings including self-employed earnings
- failing to declare or under-reporting capital
- failing to declare a partner contributing to the household
- incorrect reporting of housing costs
- failing to declare moving abroad or dishonestly applying for benefits while living abroad.
The DWP says: "These frauds are perpetrated both by opportunists and by serious criminals. We have seen organised crime groups stealing people's identities to commit welfare fraud and, in some cases, welfare fraud has been linked to other organised crime, such as modern slavery and trafficking
" In other cases, instruction manuals for fraud have been shared across social media such as providing a step-by-step guide on how to make fraudulent claims." It explained that almost all benefit payments go into current accounts and around 90 per cent of capital fraud and error is identified in high street or online accounts.
In the case of Universal Credit, the rules say that people's payments should be reduced if someone has more than £6,000 in savings and will stop altogether if someone has over £16,000. But failing to declare large amounts of cash is the third highest form of fraud, after under-declaring earnings and not informing the DWP of living together with a partner.
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A small-scale fraud test carried out by the DWP in collaboration with one bank identified 549 cases where people had capital that was above the limit to claim benefits. In some cases, this was disregarded because it was from a legitimate exception such as personal injury compensation, but half of the suspect accounts were found worthy of investigation. In just under two-thirds of those, benefit payments were corrected while a small number of people were either penalised or prosecuted.
The DWP says it wants to expand its powers because current rules mean it can only request information from third parties such as banks on an individual basis, where it already has a suspicion of fraud such as undeclared savings or signs that a person is living overseas. It said: "We will remove this restriction so we can widen this list and allow us to require any information holder that we believe could hold information to prove or disprove a fraud allegation, to provide that information to us."
And it added: "To enable us to investigate and disrupt serious and organised fraud activity more decisively and quickly, we plan to create new powers so our officers will be able to undertake arrests and apply to search and seize evidence in criminal investigations, when parliamentary time allows. This will enable them to act in a timely fashion, without always having to rely on police resources. Investigators would be required to make the same decisions and comply with the requirements as the police currently do, ensuring that action taken is in accordance with the law."
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