Some Truths About Benefit Fraud

In 2009 the DWP published some statistics about benefit fraud. These can be found in the document entitled: Fraud and Error in the Benefit System: April 2008 to March 2009. We are right to be worried about this as it depletes resources that should otherwise go to worthy people. There are three sources of benefit overpayment: fraud, customer error and official error. Here's the graph of the period 1997/8 - 2008/9 for Income Support and Job Seekers Allowance.

There are two main things to say about this. Firstly in the last 10 years there has been a massive reduction in benefit fraud overpayments. This appears to have bottomed out in 2005/6 and to have had a small increase since then. To be clear the reduction is from £850m to £330, with a low of £290m in 2005/6.

Fraud overpayments are less than half what they were a decade ago. How did this get lost in the discussion!?

Now notice that as fraud has gone up, official overpayments have gone up by the same amount. So 50% of the increase (more or less) of the increase from the low figure of £290m is due not to increasing fraud but to official errors (i.e. incompetence).

At the same time there the contribution from the customer has remained much the same -getting as high as £160, but presently at about the same as it was a decade ago.

As it stands about half of the overpayments are due to fraud, ie people deliberately misleading the DWP, and about half are due to mistakes by either the customer or the DWP (with the DWP making twice as many mistakes as the customer).

The DWP are responsible for one third of the overpayments - let's target them for efficiency savings!

Here are the figures from the report in a table:

Year	Fraud	Customer Error	Official Error	Total
1997/98	850,000,000	100,000,000	280,000,000	1,220,000,000
1998/99	780,000,000	90,000,000	330,000,000	1,190,000,000
1999/00	760,000,000	90,000,000	260,000,000	1,120,000,000
2000/01	690,000,000	80,000,000	200,000,000	980,000,000
2001/02	600,000,000	120,000,000	220,000,000	940,000,000
2002/03	570,000,000	110,000,000	250,000,000	920,000,000
2003/04	400,000,000	160,000,000	290,000,000	840,000,000
2004/05	290,000,000	140,000,000	250,000,000	680,000,000
2005/06	240,000,000	150,000,000	180,000,000	570,000,000
2006/07	300,000,000	110,000,000	170,000,000	590,000,000
2007/08	280,000,000	120,000,000	140,000,000	540,000,000
2008/09	330,000,000	110,000,000	200,000,000	640,000,000