Universal Credit: Fraud

(asked on 17th March 2022) - View Source

Question to the Department for Work and Pensions:

To ask the Secretary of State for Work and Pensions, what steps she is taking to reduce levels of fraud and error in universal credit.

Answered by
David Rutley Portrait
David Rutley
Parliamentary Under-Secretary (Foreign, Commonwealth and Development Office)
This question was answered on 21st March 2022

We take any case of fraud and error extremely seriously and actively pursue fraudsters, using a wide range of powers to bring them to justice.

Last Autumn we announced a significant increase in our investment in Counter Fraud, Compliance and Debt operations by 75%, up to £1.4bn over the next three years. We are using this to scale up our existing operations, enhance our approach to data and intelligence and set up a new targeted review of the Universal Credit (UC) caseload. This will generate billions of savings over the scorecard period.

We published figures in the DWP Annual Report and Accounts 2020-21 that showed the estimated rate of fraud and error in Universal Credit was 14.5%, up from 9.4% in 2019/20.

These estimates are based on in depth reviews of a random sample of around 3,000 Universal Credit cases (taken between February and November 2020) to establish the extent of Fraud and Error. The level of fraud and error found in this sample is then applied to the 2020-21 Universal Credit expenditure to give our overall estimate. During the early months of the pandemic we faced unprecedented levels of claims, with 2.4 million new UC claims between 1 March and 26 May 2020. We took a decision to implement easements to ensure we could prioritise payments to those who needed help during this difficult time. This meant that although the overall level of fraud and error in Universal Credit across the year was 14.5%, the subset of claims made after the pandemic started had a level of 25.6%. Claims prior to the pandemic remained at a level of 9.4%. This detailed analysis indicates that the total overpayment for fraud and error for claims from the start of the pandemic (in 2020/21) was £3.1 billion, of which £1.1billion being overpaid due to incorrect information about self-employed income.

It is regrettable that people may have sought to exploit the extraordinary circumstances of a global pandemic for gain by not reporting changes in circumstances or even making false claims. This is particularly true for bogus claims orchestrated by organised criminals.

During the pandemic, we were able to detect and shut down systematic attacks on the benefit system, including preventing £1.9bn from an attack from Organised Criminals in May 2020. We removed the easements as early as possible from June 2020 and introduced new processes, including a new Enhanced Checking Service created in April 2020, comprising a team of trained investigators who review claims and contact claimants in order to obtain further information or evidence where there is suspected fraud. In total we estimate that we have prevented nearly £3bn of additional fraud and error.

Our rigorous checks to prevent fraud are now back in place and the new targeted UC case reviews funded as part of the £1.4bn investment will be focused on relentlessly pursuing and finding incorrect claims and driving out the Fraud and Error. We are determined to combat all attempts at fraud and will not hesitate to pursue those who exploit the system when benefits are there to support those most in need.

Fraud and error in the benefit system: financial year 2020 to 2021 estimates - GOV.UK (www.gov.uk)

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