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The DWP's estimates for benefit fraud for 2010 - 2011 are here.
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Expenditure
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Fraud
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Last measured
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| Income Support |
£7.9bn
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2.4%
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£190m
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Oct09 - Sep 10
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Jobseeker's Allowance
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£4.5bn
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4.1%
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£180m
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Oct09 - Sep 10
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Pension Credit
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£8.3bn
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2.3%
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£190m
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Oct09 - Sep 10
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Housing Benefit
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£21.6bn
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1.3%
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£290m
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Oct09 - Sep 10
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Instrument of Payment
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£0m
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Oct09 - Sep 10
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| Disability Living
Allowance |
£12bn
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0.5%
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£60m
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Apr 04 - Mar 05
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Retirement Pension
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£69.9bn
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0.0%
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£0m
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Apr 05 - Mar 06
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Carer's Allowance
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£1.6bn
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3.9%
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£60m
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Apr 96 - Mar 97
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Incapacity Benefit
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£5.6bn
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0.3%
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£20m
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Oct09 - Sep 10
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Interdependencies
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£10m
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Apr 10 - Mar 11
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Unreviewed
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£17.2bn
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0.9%
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£160m
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Council Tax Benefit
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£5.0bn
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1.2%
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£60m
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Oct09 - Sep 10
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These latest figures take the DWP's central estimate of benefit
fraud up to £1.2bn, with a range of £1.0bn to £1.6bn.
The government itself claims
that benefit fraud by the relatively few claimants living abroad
is running at £63m a year. That would reduce benefit fraud
by people living in the UK to some £1.14bn.
On top of all this, a realistic
estimate for tax credit fraud would be £1bn.
In a jobseekers'
allowance pilot in 2011, 20% of those ordered to take part in
four-week community projects stopped claiming immediately and another
30% were stripped of their benefits when they fail to turn up. Now
we clearly can't extrapolate a 50% fraud level across all jobseekers'
allowance claimants, but let us cautiously add an a second 4.1%
to the fraud total, doubling it to 8.2% - which at this stage seems
realistically conservative.
And the National Fraud Initiative identified probable fraud in
council tax single person discount at a "cautious" £200m.
The DWP have gradually edged their figure up from £40m to
£50m and now to £60m. Sampling
by a private firm suggests a total above £300m.
In Lambeth, use of voice recognition software identified over 18%
of claimants as benefit cheats. As shown above, the government's
national figure for housing benefit fraud is £290m. At 18%
this would be over £3.8bn for housing benefit fraud alone!
The number of people claiming disability
living allowance has roughly trebled since its introduction
in 1992 and currently only 6% of claimants have their claim medically
assessed by a specialist for the purpose of their claim. It seems
a fair guess that the amount of fraud is significantly higher than
the 0.5% the DWP currently claims. The DWP's budgetary guess is
20%. Let's stay far lower, at 5%.
The government figure for incapacity benefit fraud has leapt
from £10m to £60m but it's
still laughably small. One single sentencing session for single
person benefit frauds in Merseyside identified
frauds approaching £1m. That's just 21 claimants for one
type of benefit in one authority area.
Two
out of three claimants for the new employment and support allowance
fail. If we cautiously assume that even one third of
those on incapacity benefit should not be there, that alone represents
a figure of £2.2bn.
How would cautious adjustments affect the benefit fraud total?
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Government total
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£1,200m
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Tax credit fraud - add
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£1,000m
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Jobseekers' Allowance - add
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£180m
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Council tax single person discount fraud - if total £300m,
add
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£240m
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Housing benefit fraud - for a cautious 5% fraud rate add
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£790m
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Disability living allowance
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£540m
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Incapacity benefit fraud - for a cautious 25% fraud rate
add
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£1,584m
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Swansea council estimated that benefit fraud costs around £100
a household each year - over £2 billion nationally. Fraud
Central - a partnership of the DWP and four scottish councils -
remarkably says
that "Benefit Fraud costs upwards of £2 billion per year".
And it points out that
"Benefit Fraudsters not only affect Social Security benefits,
they can have free prescriptions, free eye tests and free dental
treatment costing the NHS millions of pounds per year."
But the truer figure - for benefit fraud alone - now looks closer
to £6bn a year.
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