Benefit fraud occurs when a person receives unemployment benefits even though they have a job or they claim disability benefits even though they don't meet the health criteria. They are lying about their circumstances in order to receive benefit payments, which is a form of fraud.
Between 2021 and 2022, the government made an estimated net loss of £7.6 billion or 3.5% of benefit expenditure due to benefit fraud. This means that there was a large portion of people who were illegally claiming benefits that they weren't entitled to, which puts a strain on the welfare system.
There are a number of ways that the government tries to tackle benefit fraud. If an individual is suspected of benefit fraud, they will be involved in an investigation that can occur over a number of weeks or months.
Individuals who are suspected of committing benefit fraud will be contacted by one of the following departments: Department for Work and Pensions (DWP), HM Revenue and Customs (HMRC), the Service and Personnel and Veterans Agency or the local authority. Fraud Investigation Officers (FIOs) may visit them at their place of residence or workplace or ask them to attend an interview to discuss the situation.
The individual's benefits may stop as the investigation is conducted. If they are interviewed under caution, this formal interview may be recorded and used as part of a criminal investigation about you. The individual can have a solicitor with them during the interview to help them understand the proceedings.
Continue reading to learn more about the types of benefit fraud and a more detailed explanation of the investigation process.
There are different ways that some people fraudulently claim benefits. Below is a breakdown of some of the different types of benefit fraud.
Working and claiming
Some people may try to claim housing, Council Tax, or job seeker benefits even though they are in employment or are self-employed.
False claims
Some people may invent a fictitious landlord, create false rent books and tenancy agreements and state they pay rent in order to receive housing benefits.
False address
Someone may claim housing benefits for an address that they don't live at or that they used to reside at and have since moved out of.
Landlord fraud
A landlord may continue to receive a benefit payment on behalf of the tenant even though the tenant has since moved out of the property.
Not disclosing property, capital or income
Someone may claim benefits but fail to disclose the extent of their property, capital or income in order to receive more benefits.
Not disclosing non-dependants or sub-tenants
A claimant may not disclose other adults that live at the same property as they do in order to increase or maintain their benefit entitlement. For example, someone may not mention they are married and living with their spouse to continue receiving housing and Council Tax benefits.
A common way for someone to be caught in fraudulent benefits activity is if another person anonymously reports them to a government department (such as HMRC or DWP). This may be a family member or person in the local community who suspects that the claimant isn't entitled to the benefits they are receiving.
If the local authorities suspect that someone is fraudulently claiming benefits, they may put them under surveillance or observation. They may have suspicions due to cross-referencing financial data and other information that they have on the claimant or because someone has tipped off the authorities. The surveillance could be carried out when the claimant visits their local Jobcentre Plus office to claim their Jobseeker's Allowance, for example.
Fraud Investigation Officers (FIOs) might conduct home visits and interviews to check that the information they have on claimants is correct. If they observe or hear something that contradicts what the claimant had originally said about their situation, the FIOs might investigate further and order a formal interview.
FIOs might use channels such as internet searches and social media accounts to check whether a claimant is being truthful. For example, if the claimant says that they are unemployed to receive benefits but post on their Facebook about their job, this is grounds to conduct further investigations.
Sometimes spot checks are conducted on individuals who receive a certain type of benefit or individuals who fit specific criteria. These random checks are to make sure that everyone is receiving the right benefit and the right amount. During these checks, if someone is suspected to be fraudulently claiming a benefit, they will be subject to further investigation.
The relevant government authority (such as Department for Work and Pensions (DWP) will contact the claimant and state that they are under investigation. The claimant's benefits may stop while their case is investigated. If this happens, they will be sent a letter notifying them that this has happened. They won't receive the benefits until the investigation has been concluded and the claimant's rights to the benefits have been verified.
The FIOs who are investigating the case may conduct a formal interview. They will collect information about the case and determine whether the claimant has been receiving benefits based on false information. The FIOs may look at bank statements, property and tenancy contracts and other legal documents to inform their decision. They will also ask to see the individual's National Insurance number.
Depending on the severity of the case, the individual may be summoned to court and given a custodial sentence if they are found guilty of benefits fraud.
Government agencies share information with each other to help prevent benefits fraud. for example, HMRC may share income information with DWP to show how much income and tax someone is paying. This can help FIOs to work out whether the claimant is receiving the right benefits and the correct amount based on their financial circumstances.
Individuals have to pay back the amount they were overpaid from falsely claiming benefits, along with a fine (between £350 and £5,000) and a ban on certain benefits for three years if they are found guilty of benefit fraud. The issuing of penalties can act as a deterrent against people who may consider committing benefit fraud.
Government agencies such as the DWP have reduced manual processing and introduced various digital systems to help prevent benefit fraud. These systems automatically detect discrepancies to make sure that claimants are being truthful about their income and financial situation in their benefits applications.
Some benefits can be stopped or reduced for up to three years if an individual is found guilty of benefit fraud. These are called 'sanctionable' benefits and include:
- Carer's Allowance
- Housing Benefits
- Jobseeker's Allowance
- Universal Credit
- Employment and Support Allowance
However, there are also benefits that cannot be stopped or reduced, even if someone is found guilty of benefits fraud. This includes the following:
- Child Benefit
- Disability Living Allowance
- State Pension
- Personal Independence Payment
- Social Fund Payments
If you are found guilty of benefit fraud but receive one of the following, none of your benefits can be stopped or reduced:
- Maternity Allowance
- Statutory Adoption Pay
- Statutory Maternity Pay
- Statutory Paternity Pay
- Statutory Sick Pay
You will be sent forms to fill out if you are suspected of benefit fraud. It's important that you fill these forms out with accurate information. You may be asked questions about:
- who you live with
- the hours that you work (employed or self-employed)
- whether your health is the same or has improved
- any other life changes that could have affected your benefits claim
Ideally, you will have evidence that backs up your situation. For example, you could ask your doctor for a letter that states your current medical condition or a utility bill that shows your partner's name and address to prove they don't live with you.
You may be asked for a formal interview under caution. This is a good time to seek legal advice, either from a solicitor or from Citizens Advice.
If you are found guilty of benefit fraud, you can appeal the decision. You will have to ask the relevant department, such as Department for Work and Pensions (DWP) or HM Revenue and Customs (HMRC), to review their decision.
The DWP will issue a ‘Mandatory Reconsideration Notice’ if you appeal a decision. The notice should tell you if you can make an appeal to an independent tribunal. You won’t need a Mandatory Reconsideration Notice if HMRC has refused to extend your deadline to challenge a tax credits decision.
You have to appeal the decision within one month of the Mandatory Reconsideration Notice being issued. If you don't appeal the decision within one month, the tribunal may accept your appeal up to 13 months after the initial decision. If your appeal is late, it should include an explanation of why you couldn't issue it on time (such as illness or postal delays). You should also explain how the decision will affect you, such as causing you severe financial difficulties in the coming weeks or months.
There are certain things that you can't appeal, such as when and how your benefit is paid to you, and the suspension of your benefits whilst the DWP or HMRC check your eligibility for benefits.
You can report benefit fraud on the government website if you think someone is claiming benefits that they shouldn't. You will be asked for information on the person, such as their full name, address and the type of fraud you believe they are committing.
After you have filled out the form, the Department for Work and Pensions Fraud and Error Service will use the information you have provided to investigate the individual. They will only take action if they find evidence that the individual has been committing benefit fraud. You won't be informed of the investigation's outcome either way.
if you'd rather not complete the form online, you can phone 0800 854 440 or write to
National Benefit Fraud Hotline
Mail Handling Site A
Wolverhampton
WV98 2BP
The report can be anonymous as you don't need to provide your name, address or any other contact details (unless you want to).
There are systems in place that can help government departments find out when individuals commit benefit fraud. Members of the public can report individuals that they suspect of committing benefit fraud. Local authorities can conduct spot checks, and digital systems can cross-reference financial statements to flag discrepancies.
A Fraud Investigation Officer can conduct a benefit fraud investigation to find out whether an individual has been making a benefit claim that they aren't entitled to. The proceedings may escalate to a criminal investigation if the individual is found guilty of benefit fraud.
During the investigation, the individual may have their benefits stopped. However, this depends on the type of benefits they are claiming, as only sanctionable benefits (such as Jobseeker's Allowance and Housing Benefits) can be stopped or reduced. Other types of benefits, such as Child Benefits and and Disability Living Allowance cannot be stopped or reduced whilst someone is under investigation.