George Osborne has compared benefit fraudsters to muggers in a recent speech:
“Frankly, a welfare cheat is no different from someone who comes up and robs you in the street. It’s your money. “You’re leaving the house at seven in the morning or whatever to go to work and paying your taxes – and then the person down the street is defrauding the welfare system.
The comparison seems somewhat tenuous, as often muggings are violent and can leave the victim traumatised (presumably the comparison holds for everyone who has defrauded the taxpayer).
That aside, there are some problems cracking down on benefit fraud. Some fraud is unintentional; the system can be monstrously complex and people often find themselves receiving benefits without realising the precise rules. Take somebody who is receiving Employment and Support Allowance (ESA) for a damaged spleen, as well as Council Tax Benefit and Housing Benefit, who then goes back to work. If she works under sixteen hours a week, and earns under £94 a week, all her benefits will continue for a year, then will be reviewed. If she earns over £94 a week or work over sixteen hours, she will lose her ESA and have her Housing Benefit and Council Tax pro-rated depending on income. She may be entitled to Working Tax Credit (a varied sum) depending on her previous year’s income and expected income for the next year. She could also get Return to Work Credit of £40 a week for a year if she earns under £15,000 a year, unless she is a lone parent, which will see her net £60 a week in the form of an in-work credit instead (in that case her Child Tax Credit will also be affected too).
That’s the straightforward bit. The real difficulty is letting everyone know. Once a person goes back to work, all the relevant divisions have to be contacted. The benefits delivery centre needs to be contacted (and they can only be accessed by telephone, not face to face) to inform them about going back to work. The Return to Work/In Work Credit form should be completed via the job centre; the Working Tax Credit office needs to be phoned, and it is very difficult to get through to them. the local council’s housing department needs to be told too. All this should be done in the first couple of weeks of returning to work, during office hours, which can be rather difficult if a person is working full time. Any of the divisions may be tardy in getting back to her, leaving her without an income from that particular source (even if it is backdated later). And woe betide if her circumstances change (such as her earnings rising to £15,000+) and she doesn’t inform everyone quickly enough. She may have her future benefits/tax credits docked to repay any overpayment (even if it was not her fault); she may even be prosecuted for benefit fraud.
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