Fraud and Error in the Benefit System

Thursday 16th May 2024 Written Statements

[The Parliamentary Under-Secretary of State for Work and Pensions (Paul Maynard)]

The annual statistics for fraud and error in the benefit system for the financial year ending 2024 were published earlier today.

Fraud and error is an ongoing challenge across Government and beyond. In 2023, fraud was responsible for 37% of all crime against households and there has been a rising trend in fraud against organisations. With welfare benefits paid to around 22.7 million people, the welfare system is a deliberate target for both organised crime groups and opportunistic individuals.

Today’s figures confirm the overall rate of overpayments is now 3.7% (£9.7 billion) for 2023-24, compared to 3.6% (£8.3 billion) in 2022-23. Overpayments due to fraud were 2.8% compared to 2.7% last year while claimant error and official error remained at 0.6% and 0.3% respectively. The rate of overpayments in universal credit was 12.4% in 2023-24 compared to 12.7% in 2022-23.

It is vital that the Government continue to robustly tackle fraud to ensure support goes to those who need it most. We are taking further steps to minimise errors, ensuring the right people are paid the right amount at the right time. The total rate of benefit expenditure underpaid in 2023-24 was 0.4% (£1.1 billion), compared with 0.5% (£1.2 billion) in 2022-23.

This week the Government have published an update to the Department of Work and Pensions’ fraud plan, “Fighting Fraud in the Welfare System: Going Further”, highlighting measures we are taking to prevent and stop fraud.

In 2023-24, we exceeded the £1.3 billion savings target we set and expect our plan to deliver £9 billion in total by 2027-28.

Since 2022 we have delivered on commitments to invest in our front line, hiring over 4,400 people across our counter-fraud and targeted case review programmes combined. We will continue to expand our targeted case review team to almost 6,000 by March 2025.

We are delivering new powers to improve our access to vital third-party data so we are better able to identify fraud and take action. The third-party data gathering measure is a strong, yet proportionate step to prevent exploitation of the benefit system and will save up to £600 million over the next 5 years.

We are preparing a new fraud bill for the next Parliament which will align the Department with HM Revenue and Customs, provide new powers to make arrests and conduct search and seizures by warrant, and enable penalties to be applied to a wider set of fraudsters through a new civil penalty.

This is an ambitious package which we will deliver to protect the taxpayer and help uphold the principles of fairness that sits at the heart of the welfare system.

Today’s publications also include changes to claimant error underpayments. These have been reclassified and reported as unfulfilled eligibility in the benefit system publication. This follows a planned review of the fraud and error statistics that determined that the estimates previously published as claimant error underpayments do not fit the legal definition of underpayments. The total unfulfilled eligibility rate in 2023-24 was 1.2% (£3.1 billion) compared with 1.0% (£2.3 billion) in 2022-23.

We will report more on both overpayments and underpayments by way of our annual report and accounts, which are due to be published in July 2024.

[HCWS476]