Minister lies about benefit fraud

Tony McNulty has repeated the old lie that Labour have cut fraud by two thirds since 2001.

The cost of benefit fraud now stands nationally at around £800m per year. Although that’s £1.3bn less than in 2001, it is still £800mn too much.

If Mr McNulty is competent, he knows he is lying.

1. The National Fraud Initiative identified probable fraud in council tax single person discount at a "cautious" £200m. That is nowhere in the DWP's figures. Kirklees Council recently reported that they alone foresee a saving of £900,000.
   
   
2. In Lambeth, use of voice recognition software identified over 18% of housing benefit claimants as benefit cheats. The government's national figure for housing benefit fraud is £190m (1.2%). At 18% this would be £2.85bn for housing benefit fraud alone.
   
   
3. The DWP pretends that incapacity benefit fraud is a mere £10m (0.1% of the amount paid out - last reviewed way back in 2000-1). Yet government also claims that there is scope to get hundreds of thousands of incapacity benefit claimants back to work. Do they really think that only 0.1% of those claims are fraudulent?

Swansea council have estimated that benefit fraud costs around £100 a household each year - over £2 billion nationally.

That too may be a "cautious" estimate.

Mr McNulty follows the Labour maxim that repeating the same lie often enough will get it believed.

Tony McNulty is not telling the truth about benefit fraud.

Catching up on benefit frauds

Benefit fraud hasn't stopped and here's a quick round-up. In looking at sentences, bear in mind that the administrative penalty for the less serious cases which don't go before the courts is 30%.

Clive Parsons from Kidderminster over-claimed more than £48,000 and was sentenced to 12 months in prison, with six months to be served on licence.

Kelly Scott, also from Kidderminster, falsely claimed £14,105 by saying she was a single parent. She just got a community order for 12 months with 180 hours unpaid work, and an order to repay her winnings.

Khalid and Naseem Mahmood from Chesham must pay back more than £14,000 they fraudulently claimed in benefits. Data matching revealed that he had a taxi licence, but he had not declared any income from his work. He was ordered to pay £1,000 in costs and given a 240 hour community service order. She was given a two month suspended prison sentence, made to do 100 hours of community service and ordered to pay £500 costs.

A former Oxford student has got off very lightly. Yarrow Davies overclaimed almost £45,000 by not revealing grants and income she was receiving. Sentence? Nine months suspended, 150 hours community service and £200 costs. This punishment does not fit the crime.

But Katheleena Payet, an NHS care worker from New Addington, was jailed for eight months for a benefit fraud of £21,401. She managed to claim while working for the NHS for four years! Finally data matching caught her.

"A fraudster who worked as a security guard at a greyhound track while claiming incapacity benefit has been spared jail", writes the Sunderland Echo. Howard Brooks worked while claiming he was unfit, and fraudulently got £11,659 in benefits. He received a community order for two years, with 250 hours of unpaid work and £250 costs.

In general the courts give lighter sentences when the claim is not fraudulent from the outset. But it is still a fraud on taxpayers, and the punishment is too often far too small to be a deterrent.

A few more benefit fraudsters

Okechukwu Ezeh from Wandsworth made a bogus claim for £11,416 to cover rent payments. The jury decided he had not been framed by MI5 and MI6 as he claimed, and he was jailed for 10 months.

But Denise Harris from Mawdesley, who falsely claimed over £6,000 by not revealing that she and her partner had occupational pensions, was only fined a total of £400 and ordered to pay £75 costs and a £15 surcharge.

• People convicted of benefit fraud should have to repay twice the amount and should not be eligible for further benefits – including tax credits - until they have.

More benefit fraud cases

Diane McGowan from Runcorn received a sentence of eight months’ imprisonment, suspended for two years and 250 hours’ unpaid work, after admitting fraudulently claiming £23,230, which she was ordered to repay. She said she lived alone when her husband, who worked full-time, lived at the property.

That's about an hour for every £100, which doesn't seem a big punishment.

In another light sentence John Williams from Newton-le-Willows received merely a conditional discharge and an order to repay after falsely claiming £6424.

People convicted of benefit fraud who don't receive a custodial sentence should have to do unpaid work. Benefit fraudsters should also have to repay twice the amount and should not be eligible for further benefits – including tax credits - until they have.

But two benefit fraudsters have been jailed. Neil Fern from Bramcote fraudulently obtained benefits of £28,000 through concealing that his wife was his landlord. He was jailed for twelve months and is repaying at £20 a month, which would take 116 years.

Benefit fraudsters should also have to repay twice the amount and should not be eligible for further benefits – including tax credits - until they have.

After an anonymous tip-off, Christopher Ogunbiyi from Acton has been jailed for two years for fraudulently claiming £27,000 housing benefit on two properties.

He began claiming housing benefit for a flat in Horn Lane in 1995, with the rent being paid direct to his landlord, but failed to tell the council when he moved out in 2004 and let an illegal immigrant move in. Ogunbiyi moved to a flat in Morland Gardens, Southall, and legally changed his name to Christopher Thomas, before applying for housing benefit at this property too.

The name change would have defeated database matching.

Benefit fraud prosecution rates

The Public Accounts Committee has taken HMRC to task for its low prosecution rates.

Edward Leigh points out that the DWP are prosecuting 60 cases per thousand benefit fraud cases, while HMRC prosecute two cases per thousand hidden economy cases. "I am not suggesting that you should rise (sic) to the level of 60 per thousand", he says.

HMRC point out that prosecution is dearer for tax fraud than for benefit fraud. We may leave other blogs to their moral indignation at the logical consequences of these numbers.

The DWP's prosecution rate, though higher, is still shockingly low. The chance of being prosecuted for tax evasion is "tiny". The chance of being prosecuted for benefit fraud is also tiny.

Hence the DWP needs other ways to discourage people from committing the offence. One way would be to legislate for stiffer sentences. We often see ridiculously light sentences for benefit fraud.

People convicted of benefit fraud who don't receive a custodial sentence should have to do unpaid work. Benefit fraudsters should also have to repay twice the amount - and should not be eligible for further benefits or tax credits until they have.

The DWP has publicity campaigns claiming there is no hiding place for benefit fraudsters - plainly untrue. They would carry more weight if the administrative penalty for benefit frauds was 100% - with disqualification from benefits and tax credits until the backlog and the penalty had been met.

We are not talking here about innocent people getting understandably enmeshed in regulations which are too complicated for any ordinary mortal to understand. We are talking about deliberately defrauding the system.

There needs to be a simple, clear tariff which people can understand. Give a three month amnesty. During that period people could confess under the present arrangements.

Then the new arrangements could be introduced. Under administrative penalties you will have to repay twice the amount - and will not be eligible for further benefits or tax credits until you have. If you are prosecuted, the same tariff will apply. But in addition, you will have to do unpaid work if you don't receive immediate imprisonment.

Expect then benefit fraud to fall from its present £2bn+ a year.

Fraud in Falinge

Falinge in Greater Manchester has been named as the sick note capital of the country, reports the Manchester Evening News.

490 of the 1,141 people of working age - 42.9% - are claiming incapacity benefits.

We can sympathise with the district's post-industrial downturn. But these numbers suggest a local culture of incapacity benefit fraud.

Two light sentences

Leonard Parry from Caernarfon fraudulently claimed £17,323 in housing and council tax benefits.

An anonymous telephone call alleged that Mr Parry had not lived at his flat for the last five years, and was living with his ex wife. A council investigation team made enquiries with the supplier of electricity to the flat which revealed that electricity usage was minimal. He was sentenced to four weeks in jail, suspended for 12 months and ordered to carry out 150 hours unpaid work in the community.

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Brian Capon from Peterborough obtained some £35,000 fraudulently and was sentenced to twelve months' jail. Three appeal court judges have now described the sentence as "manifestly excessive" and reduced it to six months.

Family in 'massive and convoluted' £75,000 housing benefit fraud

Rakysana Bibi Muneer, Mohammed Ayoub Alam and Mahboob Hussain Alam from Leeds have pleaded guilty to fraud charges in the second biggest benefits fraud case in Leeds this year, which brought the family almost £75,000 and allowed them to buy numerous properties across the city.

Mohammed Ayoub Alam, was overpaid £6,729 and was jailed for six months. Sentencing of Mahboob Hussain, who claimed £25,270, was deferred.

Mother-of-four Rakysana Bibi Muneer of 9 Carr Manor Grove, Leeds, was given a 16 month prison sentence, suspended for two years, over six counts of making false statements for and falsely claiming housing benefit of £42,677. The council was awarded £5,000 costs over her case.

A slap on the wrist.

Organised benefit fraud

Thirteen career criminals have been reported to the police for serious benefit fraud as the social insurance agency continues the hunt through a new unit set up to tackle widespread abuse of the system among criminal gangs.

The most common abuse of the system is within sickness benefits. Several of those reported to police have been found to have reported fictitious employer details, incomes and vague references.

This initiative is in Sweden, by the way. 

Is there likely to be less organised criminal benefit fraud in the UK?

DWP delay saves benefit cheat from jail

Joanne Douglas from Sunderland, who claimed over £20,000 she was not entitled to, will be spared jail, because the DWP was too slow.

She was interviewed by the DWP in 2005 for failing to tell them that her partner was working, but only now has her case come to court.

Judge Beatrice Bolton said the wheels of justice at the DWP were "appallingly slow". 

Ordinarily this would result in a custodial sentence but in your circumstances, having regard to the long wait you have had, it seems to me it would be grossly unfair to send you immediately to custody.

Benefit fraud sentences

Ann Jones from Fenton falsely claimed benefits of £10,000 for nearly three years after her health improved. She is repaying £72 a month. She received a six-month prison sentence, suspended for 18 months.

Derek Lamb, from Brentford, has been jailed for 18 weeks after admitting benefit fraud of £31,000 . Between January 2003 and September 2006 he took £17,929 in housing benefit, £3,502 in council tax benefit and £10,259 in income support, claiming as a single person while he was living with his partner, who was working full time.

What took them so long?

David Lovell from Bristol was jailed for nine months in June for benefit fraud totalling £47,761. He was released in September.

BBC slashes benefit fraud total

The BBC claims in a news story today that

Benefits cheats cost the UK taxpayer an estimated £400m a year.

Even the DWP offers a figure of £800m! - and that is demonstrably too low.

1. The National Fraud Initiative identified probable fraud in council tax single person discount at a "cautious" £200m. That is nowhere in the DWP's figures. Kirklees Council recently reported that they alone foresee a saving of £900,000.
   
   
2. In Lambeth, use of voice recognition software identified over 18% of housing benefit claimants as benefit cheats. The government's national figure for housing benefit fraud is £190m (1.2%). At 18% this would be £2.85bn for housing benefit fraud alone.
   
   
3. The DWP pretends that incapacity benefit fraud is a mere £10m (0.1% of the amount paid out - last reviewed way back in 2000-1). Yet government also claims that there is scope to get hundreds of thousands of incapacity benefit claimants back to work. Do they really think that only 0.1% of those claims are fraudulent?

Swansea council have estimated that benefit fraud costs around £100 a household each year - over £2 billion nationally.

That too may be a "cautious" estimate.

More benefit fraudsters

Ian Wheeler, a benefit fraudster from the Reading area, has been sent to prison for eighteen months after falsely claiming benefit of almost £150,000 over thirteen years.

He made false claims for income support, invalidity benefit, incapacity benefit, housing benefit, council tax benefit and disability living allowance from 1993 to February 2006, stating he was not working when he was actually in full-time employment.

His wife also made benefit claims while she was working and was sentenced to 100 hours of community service.

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Martin Williams from Kirkham, who said he was too ill to work with a heart condition, had three jobs between May 2005 and July 2007 and cheated the benefits system out of £7,737. He was sentenced to six months supervision and ordered to pay £100 costs.

Tax credit fraud

Ruth Hinks from Stockport, who invented four fake children to falsely claim £62,158 in benefits, has been jailed for twenty months.

She also claimed one of the fake children was disabled so she could receive the maximum amount available (and see next post). She claimed tax credits for children she had no responsibility for, including those belonging to relatives, and falsely claimed that two of her own children were disabled.

She was rumbled when someone looked at her annual renewal form.

Scandalous tax credit frauds in the West Midlands

Three sisters from Solihull with 16 children between them have been jailed for making false claims for tax credits totalling nearly £150,000. They claimed that 15 of the children were disabled - which in fact they were not - and received additional payments to which they were not entitled.

How could such blatant benefit fraud be so successful? Because tax credits are a cumbersome, incompetently managed centralised system.

Kelly Smith falsely claimed £60,107 from HM Revenue & Customs (HMRC) and was sentenced to eight months in prison.

Samantha Smith falsely claimed £50,085, and was jailed for seven months.

Katrina Smith, was sentenced to six months for falsely claiming £39,230.

A total of eight people were charged across the West Midlands at the end of October in relation to tax credit fraud amounting to £266,500.

Light benefit fraud sentences in Londonderry

Nora Shields from Londonderry claimed Income Support and Housing Benefit totalling £70,864 while failing to declare she was living with a partner. She was given a twelve month sentence suspended for three years and ordered to pay court costs of £88.

Sharon McGuiness from Londonderry claimed Income Support totalling £4,632 while failing to declare she was working full time. She was fined £400 and ordered to pay court costs of £46.

Mary Hartop from Londonderry claimed Income Support and Housing Benefit totalling £18,892 while failing to declare capital. She was given a conditional discharge and ordered to pay court costs of £51.

Derek Doran from Londonderry claimed Income Support totalling £1,698 while failing to declare he was working full time. He was given a conditional discharge.

Clare McLaughlin from Londonderry claimed Income Support totalling £1,701 while failing to declare she was working full time. She was given a conditional discharge and ordered to pay court costs of £46.

Michelle McCoy from Londonderry claimed Income Support and Housing Benefit totalling £1,796 while failing to declare she was working full time. She was given a conditional discharge and ordered to pay court costs of £73.

They are required to repay the money wrongfully obtained to the Social Security Agency.

• What deterrent is there in these sentences?
  
  People convicted of benefit fraud who don't receive a custodial sentence should have to do unpaid work. Benefit fraudsters should also have to repay twice the amount and should not be eligible for further benefits – including tax credits - until they have.

Timid step forward in benefit fraud sanctions

The government currently withdraws 13 weeks of benefit from anyone found making a fraudulent claim twice in five years, reports The Guardian, but now intends to tighten this process by withdrawing four weeks' benefit for first-time fraudsters. Most reported frauds run for far longer than four weeks. This timid step is inadequate.

The benefit withdrawal will be taken against both those that suffer an administrative penalty as well as those found guilty in a criminal court. The Guardian claims that currently the DWP seeks court penalties only where the alleged fraud is worth more than £2,000. However, we have seen cases go to court for lower amounts, and the Public Accounts Committee noted that the DWP does not prosecute most cases that would meet its criteria.

People convicted of benefit fraud who don't receive a custodial sentence should have to do unpaid work. Benefit fraudsters should also have to repay twice the amount and should not be eligible for further benefits – including tax credits - until they have.

Voice recognition pilot extended

The government will extend the pilot of voice recognition software in evaluating benefit claims - well overdue. The Guardian reports

The government also highlighted a pilot covering 25 local councils administering housing benefit to 500,000 claimants, saying "voice risk analysis technology" will be used to test whether a claimant is providing false information. The government first introduced the technology in Harrow in north London last year, but now says it plans to make the technology available nationwide. In the first three months Harrow council saved £300,000, suggesting levels of benefit fraud may be higher than government estimates.

You bet they are, as this blog has frequently stressed.

Harrow detected £363,000 of benefit fraud, and Lambeth £450,000 in five months. In the Lambeth pilot, 22% had their benefits stopped or cut, while Harrow reported that after they started the trial more than a quarter of claimants said they did not need the benefits as their conditions had changed.

The potential savings are huge.

More single person discount fraud

The National Fraud Initiative suggested a cautious £200m estimate for single person discount fraud, which would increase the government's alleged fraud total by 25%!

Now Kirklees Council report that they foresee a saving of £900,000.

A pilot scheme compared 5,000 homes with the Experian database, at a cost of £15,500. About 6% of the 5,000 homes had their 25% discount removed, meaning Kirklees can charge £80,000 in extra council tax this year.

If 6% of all Kirklees homes are taken off the discount list, an extra £900,000 a year will be collected in council tax.

A more meaningful benefit fraud sentence

Nicholas Whyte from Altrincham has been convicted of dishonestly obtaining housing benefit of £461.

He was found guilty in his absence of failing to notify Trafford Council that he had stopped claiming Job Seekers Allowance and had commenced paid employment, and was overpaid benefit between June and August 2006. The council’s counter fraud officers were alerted to the matter by a data matching exercise. He was sentenced at Trafford Magistrates Court to pay a fine of £390 and ordered to pay costs of £250.

• This is a bit more like it. He stole £461 and his penalties total £640.
  
  But this case returns us to another ridiculous aspect of the state benefits administration. We have computers nowadays, so why can't the DWP tell the local council when people come off benefits? The programming implications must be minimal, so even the government should find this cheap and easy to implement.

South Tyneside magistrates disgrace themselves

South Tyneside magistrates have let the community down by giving light sentences for benefit fraud.

Robert Rogerson, from Jarrow, wrongly claimed £5,045 in housing and council tax benefits. A Government data matching exercise found that he had substantial savings and was receiving a private pension. He was fined a paltry £100, and ordered to pay £525 costs and a £15 victim surcharge. It was his second prosecution for benefit fraud - but that didn't stop South Tyneside magistrates letting this benefit fraudster off with the merest slap on the wrist.

• Where is the deterrent in this? Evidently this recidivist wasn't deterred first time round.
  
  People convicted of benefit fraud who don't receive a custodial sentence should have to do unpaid work. Benefit fraudsters should also have to repay twice the amount and should not be eligible for further benefits – including tax credits - until they have.

Peter Mayne, from Hebburn, admitted wrongly claiming £2,320 in council tax benefit, despite selling and buying a second property. He failed to tell the authorities on several occasions that he had received a substantial amount of money in May 2003, after the sale of a second property. In a later interview he confirmed he knew he had the money and went on to confirm he also bought a property in France in 2006. He was fined a piffling £375 and ordered to pay £705 costs. He has since repaid the overpayment in full.

• South Tyneside magistrates seem to treat benefit fraud as a light-hearted game of chance. The government should be concerned by such negligent levity in sentencing.
  
  People convicted of benefit fraud who don't receive a custodial sentence should have to do unpaid work. Benefit fraudsters should also have to repay twice the amount and should not be eligible for further benefits – including tax credits - until they have.