Benefit fraud levels double to £8.6billion in just two years

Benefit fraud levels double to £8.6 billion in just two years as the government says it owes 187,000 people around £1 billion in pension payments

• Benefit fraud peaked at £8.6bn in 2021-22, almost double pre-pandemic levels

Benefit fraud levels peaked at £8.6billion in 2021-22, almost double what they were before the pandemic.

It came as the Government admitted it owes 187,000 people – mostly mothers – a staggering total of around £1billion in state pension payments.

The majority of benefits overpayments by the Department for Work and Pensions (DWP) related to fraud, with the remaining fifth or so put down to errors by claimants or officials.

The National Audit Office, the UK’s public spending watchdog, suggested the high levels of benefit overpayments were mainly driven by incorrect Universal Credit claims.

Last year fraud levels fell slightly to £8.2billion – but they still dwarfed the £4.4billion erroneously handed out by the department pre-Covid in 2019-20.

DWP Secretary Mel Stride (pictured) said: ‘Our tightened fraud controls and checks resulted in a significant reduction in fraud and error in the last year and now we are seeing the tide start to turn’

Last night the DWP launched a new ‘fraud and error’ target in a bid to stop wasting taxpayer cash, with a goal to save at least £1.3billion in 2023-24.

Some £410million worth of cost-of-living payments were overpaid to claimants last year, while a third of Universal Credit claims were incorrect in 2022-23.

The department said it overpays a quarter of all claims, while almost a fifth are fraudulent. The amount overpaid in Universal Credit fell slightly this year to £5.5billion.

The levels have prompted ministers to clamp down on the continuing waste of taxpayer cash.

DWP Secretary Mel Stride said: ‘Our tightened fraud controls and checks resulted in a significant reduction in fraud and error in the last year and now we are seeing the tide start to turn.

‘Given that our welfare system exists to provide a strong financial safety net for the most vulnerable, it is imperative we continue to prevent anyone abusing this for their own profit, which is why we’re setting a new target to save £1.3billion in the next year and root out fraud wherever we find it.’

Meanwhile, the Government has admitted that hundreds of thousands of pensioners – predominantly mothers – could be owed more than £1billion in unpaid state pensions as a result of a major blunder.

Former pensions minister Sir Steve Webb (pictured) said: ‘The scale of these errors is huge. It is shocking that so many women have been underpaid so much money. This makes it essential that things are put right as a matter of urgency’

The DWP’s accounts suggest the estimated 187,000 pensioners are owed an average of just over £5,000 each after years of receiving less money than they were entitled to.

But 43,000 of those who have been short-changed have died so will never see the money.

Many parents and carers have been affected by DWP calculation mistakes. This was because credits for time spent at home looking after children or vulnerable people were not added to their National Insurance records.

Since 1978, parents who take time out of work to care for children should have had credits added to their records, in a system called ‘Home Responsibilities Protection’.

But these years were not always recorded. And as a result, their retirement incomes from the state are lower than what they are supposed to be. This overwhelmingly applies to mothers who stopped working to care for young children.

Former pensions minister Sir Steve Webb said: ‘The scale of these errors is huge. It is shocking that so many women have been underpaid so much money. This makes it essential that things are put right as a matter of urgency.’

The Government has promised to repay the short-changed pensioners it is able to identify in a reimbursement programme that will start in autumn.

The DWP confirmed this error is the second largest source of mistakes in state pension payments, behind the £1.5billion owed to married women and widows.

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