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Pensions: Fraud

Work and Pensions written question – answered on 12th May 2011.

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Photo of David Ruffley David Ruffley Conservative, Bury St Edmunds

To ask the Secretary of State for Work and Pensions what the (a) fraud and (b) error rate was in the administration of the basic state pension in each of the last five years; how many basic state pension claimants were asked to make repayments in each such year; what the total amount of overpaid state pensions repaid was in each such year; and what the average amount of basic state pension overpaid to claimants was in each such year.

Photo of Steve Webb Steve Webb The Minister of State, Department for Work and Pensions

A measurement exercise to estimate the level of official error in the basic state pension is carried out each year. However, measurement of customer error and fraud is only carried out occasionally. The last time customer error and fraud were measured was in 2005-06. Therefore, each time the Department issues updated fraud and error data, the 2005-06 rates for customer error and fraud in the basic state pension are used, multiplied by current expenditure to give a cash figure.

The rate of official error in the administration of the basic state pension in each of the last five years is provided in the following table:

Official error rate
Overpayments Underpayments
2009-10 0.0 0.1
2008-09 0.0 0.2
2007-08 0.0 0.2
2006-07 0.1 0.1
2005-06 0.0 0.1
Note: Data are not yet available for 2010-11 Source: National Statistics reports, ‘Fraud and Error in the Benefit System’

The 2005-06 customer error and fraud rates are provided in the following table:

Overpayments Underpayments
Customer error 0.1 0.0
Fraud 0.0 0.0
Source: National Statistics report, ‘Fraud and Error in State Pension’, 2006

Details of the number of new state pension overpayments recorded in each of the last five years, the total amount repaid in each year and the average overpayment in each of those years are shown in the following table.

Volume of new overpayments Amounts repaid in year (£ million) Average overpayment (£)
2010-11 233,000 32.1 198
2009-10 368,000 33.6 169
2008-09 456,000 36.8 120
2007-08 466,000 36.3 153
2006-07 440,000 30.4 134
Notes: 1. The volume of new overpayments raised in any particular year could include multiple overpayments incurred by the same customer 2. The volume of new overpayments excludes those classified as not cost-effective to recover (generally those with a value of £65 or less). 3. The average overpayment is calculated by dividing the total value of new debt raised in any one year by the number of new overpayments raised in that year. Source: These figures are from Shared Services' Debt Manager via Business Objects computer system and are subject to rounding. The figures are management information collected for the purpose of routine administration, and therefore have not been subjected to the rigorous quality assurance that is applied to DWP official statistics.

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