Benefit fraud during pandemic cost taxpayers an ‘eye-watering’ £10.1bn

[dutchman]

The amount lost to scammers during 2021 and 2022 was five times more than all other years put together, official figures show



Universal credit pandemic fraud cost the taxpayer almost five times more than all other years put together, official figures show.

Over £10.1 billion was lost to scammers during 2021 and 2022 compared to a total of £2.1 billion for the previous five years, according to data published by the Department for Work and Pensions (DWP).

This means that during the past two years, 12.9 per cent of Universal Credit money was fraudulently claimed which equates to £1 out of every £8.

Jonathan Ashworth, Labour's shadow work and pensions secretary, accused the Government of costing the taxpayer “eye-watering” sums of money in benefit fraud.

“The Government has lost billions of pounds to fraud, at a time when families face a cost of living tsunami,” he said.

“During the pandemic, fraud and error in the Universal Credit system rose to over 25 per cent. The Conservatives effectively left the till open to organised crime.”

In 2022, the DWP lost £5.25 billion to universal credit fraud on top of £4.88 billion the previous year. This compares to a total of £2.113 billion that it lost between 2016, when the department’s records began, and 2020.

The number of Universal Credit claimants has increased over the period, but the proportion of fraud has also gone up, rising from 2.8 per cent in 2016 to 18.3 per cent in 2022.

Fraud is defined by DWP as cases where the conditions for receipt of benefit or the rate of benefit payment are not met, the claimant can reasonably be expected to be aware of this, and the benefit stops or reduces as a result of the review.

This week, the National Audit Office is due to publish its audited accounts for the financial year 2020-21 which will reveal the full scale of benefit fraud during the pandemic.

An official report published last year found that benefits fraud and overpayments hit a record high last year after the Government relaxed checks on new Universal Credit claimants.

The DWP estimates it overpaid by £8.3 billion of a total benefits bill of £111.4 billion in 2020/21, an increase of £3.8 billion on the previous year.

The 7.5 per cent proportion of fraud and erroneous payments is the highest since records started in 2005, according to the National Audit Office.

The body, which scrutinises government spending, said the coronavirus pandemic was the main cause of the increase after checks were relaxed to ensure a record number of new Universal Credit claims could be processed and paid promptly.

A surge in new claims at the start of the pandemic led to a doubling of the number of people claiming Universal Credit, from three million to six million.

Many new claimants had more complex claims, such as self-employed income, which are more vulnerable to fraud, the National Audit Office said.

It also identified several organised criminal attacks during the pandemic, with fraudsters targeting Universal Credit by making claims in other people’s names.

The department is owed £5 billion in overpayments, placing additional strain on its resources and potentially causing uncertainty and hardship to claimants, the spending watchdog said.