Fraud, Error and Debt Measures

Department for Work and Pensions written statement – made on 9th February 2017.

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Photo of Damian Green Damian Green The Secretary of State for Work and Pensions

We are committed to ensuring an effective and accurate benefit system, as part of creating a welfare system which is fair to those who use it, and fair to the taxpayers who fund it. An important part of this is recovering money owed to the Government through overpayment of benefits.

Fraud and error in the DWP benefits system is historically low, and at 1.9% is lower than in 2010. Claimant error and official error are at their lowest level ever, and we are protecting taxpayers’ money by recovering a record amount in overpaid benefits. For 2015/2016 around £1 billion was recovered jointly by the Department and local authorities, an increase of £70 million since 2014/2015.

Using DWP powers to recover tax credits debt

In order to build on this success, today, I can announce that from April 2018 the Department for Work and Pensions (DWP) will recover a segment of HM Revenue and Customs (HMRC) tax credits debt associated with people whose tax credits claim has ended. This is debt that has been subject to recovery by HMRC but where repayment has not been secured.

The claimants who have these historic debts will have previously been contacted numerous times by HMRC and invited to start a voluntary repayment plan. They will also have had the opportunity to appeal and challenge the debt.

From April 2018 DWP will begin to try to recover this debt using a wider range of methods. Where people haven’t voluntarily made arrangements to repay, this may, as a last resort include recovery directly from earnings. DWP has greater powers than HMRC in this regard.

This initiative helps deliver the Government’s commitment to reform the benefits system and switch to Universal Credit. During transition HMRC will continue to administer financial support for those with on-going entitlement to tax credits.

Using Data and Analytics to identify potential fraud and error

Many people rely on the benefit system for support – it provides a vital safety net for people who are out of work, people with disabilities, those who are carers, bringing up children, retired, or on low incomes. So it is vital that we protect it from the very small minority who try to claim taxpayers’ money they are not entitled to.

According to the most recent fraud and error national statistics around £110million is lost annually to DWP as a result of fraud and error relating to undeclared partners. The most up to date information (financial year 13/14) suggests around 1.5% of Income Support (IS) expenditure is overpaid annually as a result of a partner not being declared appropriately.

We will engage with an external data provider to identify benefit claimants thought to be most likely to have an undeclared partner more effectively. We expect that this will provide more and better evidence to enable us to identify high risk cases. The data provider will not have any contact with claimants directly or any decision making authority. All cases will be progressed through the existing DWP fraud and compliance processes.

We expect to award a contract for around 18 months and will evaluate its effectiveness in order to inform decisions about whether this type of data matching provides a useful indication of undeclared partners for future use in the Universal Credit system.

This statement has also been made in the House of Lords: HLWS476

Annotations

George Morley
Posted on 10 Feb 2017 5:24 pm (Report this annotation)

You calmly say : "An important part of this is recovering money owed to the Government through overpayment of benefits."
What about the underpayment of money owed to the Frozen Pensioners ?
This shows the poor control that the Government have over the money in the N.I.Fund which belongs to the people and you deny some of these their rightful paid for pension uprating once retired to some countries of your choosing by employing a discriminative policy of freezing using the excuse of cost and a disregard of human rights and equality.
See section 20 of the Pensions Act for a prime example of discrimination.
If the DWP had proper control of their finances then we could all be treated equally I suppose
We are expected to be honest with the Government but the reverse seems to be impossible for politicians to enact !

Andy Robertson-Fox
Posted on 11 Feb 2017 8:58 am (Report this annotation)

Presumably the position of any over payments involving the State Retirement Pension is not included in the statement from the Secretary of State as it refers to an "effective and accurate benefits system" - and the pension is an earned entitlement not a benefit.