Fraud and mistakes in benefit payments rose again in 2020-21 to the highest level on record. The need to relax checks to ensure the record number of new Universal Credit claims in the Covid19 crisis could be processed and paid was a major factor in this increase, but the National Audit Office has qualified its opinion on the regularity of DWP’s accounts for 33 years running, due to material fraud and error.
DWP has identified four of the largest causes of fraud and error within Universal Credit that it needs to tackle: incorrectly reported self-employment earnings, savings, living arrangements and housing costs.
It has also identified several organised criminal attacks during the pandemic, with fraudsters targeting Universal Credit in particular and making claims in other people’s names.
The Department is owed £5 billion in benefits overpayments, placing additional strain on its resources and causing uncertainty and hardship to claimants. It is not sure how much of its estimated loss of £8.4 billion in 2020-21 it will recover, as it has attempted to recover only 10% of the estimated loss in the last 5 years.
DWP estimates that 132,000 pensioners have been receiving less State Pension than they are entitled to due to ongoing control failings. The Department has now set aside £1 billion to reimburse people who have been underpaid their State Pension over the past 30 years. The Committee will return to the issue of state pension underpayments in a later inquiry.
The Committee will question senior officials at DWP. If you have new evidence on fraud and error in the benefits system, please submit it here by 6pm on Tuesday 7 September 2021.