Benefit fraud statistics contradict political rhetoric


by Rumbold
17th June, 2011 at 10:11 am    

Attacking ‘scrounging’ and ‘fraudulent’ benefit claimants has become a favourite pastime of politicians recently, with both Labour and Conservative ones competing to bash them. On this basis, one would assume that there is a high level of benefit fraud, with many claimants getting money that they are not entitled to. Yesterday the DWP released its own estimates of benefit fraud. It found that around 0.8% of the money allocated is due to fraudulent benefit claims. So 99.2% of benefit claims are legitimate. More money is lost to error than fraud.

The 0.8% represents a high absolute figure (£1.2 billion), and should be tackled, but demonising the vast majority of claimants as fraudsters doesn’t just mean that benefit claimants are being unfairly criticised (it can happen to anyone), but also that it distracts attention from the real issues in the benefit system: the complexity of the system and making it more worthwhile for benefit claimants to work. Given the high levels of fraud amongst MPs, all those attacking benefit claimants would be better off looking to themselves, particularly as a number of those selfsame politicians claimed excessive expenses.

(Via: Richard Exell at Liberal Conspiracy)


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  1. sunny hundal

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  2. Greg Marsh

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  3. john peter ingamells

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  6. Noxi

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  7. Jonathan Davis

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  8. House Of Twits

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  10. Saranga

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  11. Jenny Nicholson

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  12. House Of Twits

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  13. BadgerMash

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  14. John Edginton

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  15. Robert Levy

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  16. Sue Marsh

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  17. Angela Elniff-Larsen

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  18. Victoria Hubble

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  19. Rosa Edwards

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  20. Greg

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  22. Sam Dixon

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  23. vicky ayech

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  1. MaidMarian — on 17th June, 2011 at 10:45 am  

    Yes and no Rumbold.

    I get a sense that people by and large know that the amounts of out and out hard nosed criminal fraud from the benefit system is pretty low. What people really get wound up about is benefits paid to people who are, for want of a better term, ‘undeserving.’

    Now let me be clear. It might well be legit to question some benefit payments. Interestingly, some of the most popular benefits have some of the most dubious payments. Last year £25m of winter fuel payments were made to the dead. No – those were not errors, the dead are entitled to a fuel payment.

    But the cries of ‘fraud’ are, to my mind, stalking horses for debates about deserving and undeserving. Not that it is a bad thing in and of itself to have those debates of course. This is where I think that the Coalition is going wrong. How can it possibly be said to be, ‘cracking down,’ on benefit when giving the boomer generation seeming endless lollipops. Should my parents (both of whom own and run cars) get subsidised bus travel? Housing Benefit is the classic for this argument about deserving.

    As you rightly say Rumbold 99+% of claims are entirely legitimate – that we still have all the complaints should show amply the real question is about what it is legitimate for the state to pay.

    And to save you asking – yes I think University Fees under the Coaltions plans are an affront.

  2. Paul Perrin — on 17th June, 2011 at 10:55 am  

    You talk about the *number* of benefit fraudsters, and then use statistics on the *value* of the frauds.

    You state that 99.2% of benefit claims are not fraudulent – the stats don’t support you on this. The stats say 99.2% of the money paid out on benefits is not fraudulent.

    How many claims/people these figures relate to is not mentioned in the report.

    Whether the .8% figure is even meaningful overall is questionable.

    Your .8% includes benefits that are virtually impossible to defraud (like pensions, disability benefits and council tax benefits).

    Looking at other benefits, the report says (for instance) that 4.1% of job seeker allowance is claimed fraudulently and that 3.9% of carer’s allowance is claimed fraudulently – far higher than your .8% figure, but how many cases/instance of fraud this relates too is impossible to say.

  3. MaidMarian — on 17th June, 2011 at 11:07 am  

    Paul Perrin

    ‘How many claims/people these figures relate to is not mentioned in the report.

    Whether the .8% figure is even meaningful overall is questionable.’

    The number of people involved is certainly important, no question – but I would suggest that the value figure is the more important one overall.

    ‘Your .8% includes benefits that are virtually impossible to defraud (like pensions, disability benefits and council tax benefits).’

    But surely that is a good reflection on the benefit system? If it really is virtually impossible to defraud, why is that in any way a bad thing? Certinly there is no reason to strip that out of the overall stats.

    ‘Looking at other benefits, the report says (for instance) that 4.1% of job seeker allowance is claimed fraudulently and that 3.9% of carer’s allowance is claimed fraudulently – far higher than your .8% figure, but how many cases/instance of fraud this relates too is impossible to say.’

    Certainly it is true that some benefits are more open to fraud, I don’t think anyone serious has ever questioned that. But I don’t think this is any sort of argument to abolish such benefits. Some insurance policies are more open to fraud for example.

  4. Rumbold — on 17th June, 2011 at 11:19 am  

    MaidMarian:

    Long time no comment.

    I get a sense that people by and large know that the amounts of out and out hard nosed criminal fraud from the benefit system is pretty low.

    I don’t know- you only have to look at how the media reports it, often conflating error and fraud, and reporting it all as fraud.

    How can it possibly be said to be, ‘cracking down,’ on benefit when giving the boomer generation seeming endless lollipops.

    I agree 100%. That is why we need to clamp down on this intergenerational wealth transfer. I was happy to see this has begun with the raising of the state pension age earlier than planned.

    the real question is about what it is legitimate for the state to pay.

    That is an important debate to have, providing that it is conducted in a rational and reasonable manner.

  5. Optimist — on 17th June, 2011 at 11:24 am  

    “Twenty-seven leading charities* are today calling on the government to set ambitious targets to improve take-up of welfare benefits and tax credits, highlighting more than £16 billion in means-tested benefits and tax credits that currently goes unclaimed every year**.”

    £16 billon goes unclaimed, £1.2 billion claimed in fraud – I think the govt. has a preety good deal !!

    Can we now expect them to spend that £14.8 billion savings to improve the lives of the poor, refugees, asylum-seekers rather than waste it on bombing some foreign countries !!

    http://www.citizensadvice.org.uk/press_office201022

  6. Rumbold — on 17th June, 2011 at 11:24 am  

    Paul Perrin:

    You state that 99.2% of benefit claims are not fraudulent – the stats don’t support you on this. The stats say 99.2% of the money paid out on benefits is not fraudulent.

    Apologies- that was a poor use of English by me.

    Your .8% includes benefits that are virtually impossible to defraud (like pensions, disability benefits and council tax benefits).

    How are disability benefits and council tax benefits virtually impossible to defraud? You could fake an illness, lie about your work situation to carry on claiming CTB, etc.

    Looking at other benefits, the report says (for instance) that 4.1% of job seeker allowance is claimed fraudulently and that 3.9% of carer’s allowance is claimed fraudulently

    Which is why the breakdown is useful as it shows where fraud investigations should be targeted.

    far higher than your .8% figure

    Er… yes, that tends to happen when an average is produced. Some numbers are higher than the average, others are lower.

  7. MaidMarian — on 17th June, 2011 at 11:27 am  

    Rumbold –

    I agree. The real question here is not this amorphous fraud/error/maladministration etc. The real question is what should people be entitled to? As ugly as many will find it, some of the so-called middle class benefits are things I would struggle to describe as, ‘deserving.’ Fuel payments I struggle to justify.

    Access to the NHS for immigrants (not as easy or as free as the internet would have you believe) is another classic though it is not a part of the benefit system. Housing Benefit is the other favourite.

    To some degree it is great that Alan Sugar gets a fuel payment. But is that really what benefits should be about? That is the question here – frauds are a way of distracting from that big issue.

  8. Rumbold — on 17th June, 2011 at 11:34 am  

    MaidMarian:

    Yes. I am happy that things like child benefit are being phased out for most higher rate taxpayers. If you are earning £40,000+ you shouldn’t need to rely on the state, especially when there are still so many critical services (rape crisis centres, etc.) underfunded.

    Housing benefit is a difficult issue. Spending on it dwarfs most other benefits (excluding pensions), but then it would, as housing is expensive. At the moment private landlords are able to charge inflated rates, so hopefully the HB reforms will reduce the spend. But the danger is the housing market won’t prove this elastic, and people will be forced out of certain areas (which is bad for social cohesion, even if it would reduce the money spent on HB).

  9. damon — on 17th June, 2011 at 11:59 am  

    There is fraud in Jobseekers Allowance if you consider people not trying to get a job or willing to take any crap low paid job as fraud. I was in the job center just yesterday. There are jobs on the computers. For example, to work on a farm, milking cows and general work about the farm. The pay was minimum wage, no experience necessary, and just a bus ride from the city centre. Yet long term unemployed young people are in and out of that office every two weeks and not taking jobs like that.
    If the pay was £10 an hour I would consider it myself, but not at minimum wage. I’d rather be on the dole and get £67.50 a week in cash and my rent paid.

  10. Golam Murtaza — on 17th June, 2011 at 3:58 pm  

    Nice to visit a site where this issue is discussed sensibly and intelligently (even though the posters don’t necessarily agree). Refreshing.

  11. android gingerbread rules — on 17th June, 2011 at 8:23 pm  

    Well the JSA is £53.45 for under 25

  12. kevin — on 17th June, 2011 at 8:54 pm  

    If the pay was £10 an hour I would consider it myself, but not at minimum wage. I’d rather be on the dole and get £67.50 a week in cash and my rent paid.

    I said the same thing to my dad, he offered me a fiver to clean up my bedroom, i said to him i wanted a tenner otherwise it remains mum’s job.

  13. Don — on 17th June, 2011 at 9:52 pm  

    #12

    Nice one.

  14. joe90 — on 18th June, 2011 at 1:14 am  

    it doesn’t matter if 0% is fraud this conservative government still hunt down the poorest in society as if they all criminals just look at the tv commercials it’s laughable.

    why don’t the hunt down the bankers who have lost hundreds of billions including some which is blatantly fraud with same aggressive attitude?

    oops i forgot the conservatives are the bankers best friends that’s why not!

  15. damon — on 18th June, 2011 at 11:07 am  

    #12

    Nice one

    Yes indeed.
    But seriously, if you look at the kind of jobs that are left at the bottom of the barrel, I am not surprised why there is reluctance to take them.
    I was working with young unemployed and sometimes homeless people in the last year, and the fact is that they just don’t take these crap jobs. They are too unattractive. And the fact that we had a million eastern European people coming here to take them, while British people were still signing on all through the last decade, shows up the problem.
    If you are out of work and fall off any career ladder you might have had, and are basicly unskilled, the idea of being a car park attendant, or loading trucks at a warehouse, or working the night shift in a bakery, for money that leaves you totally broke anyway, is not particularly appealing. Ask yourself if you would like to spend your days that way, and still not be able to save any money or live in anything but a bedsit. You might think ”why bother” and just prefer to hang about with your mates.

  16. nobodieshero — on 19th June, 2011 at 2:16 am  

    this site is a joke the delete any thing the do not agree with

  17. Boyo — on 19th June, 2011 at 8:42 am  

    @15 (and 12) Maybe so, if you could afford to, or were allowed to. However even menial work is important – the principal that the state should support individuals who choose not to work is a serious distortion of the idea behind the social safety net.

    While millions of immigrants have taken menial jobs, millions of Britons have remained unemployed. They don’t want the work, or they cannot afford to accept minimum pay work. This has to end.

    I believe this is a feature of advanced capitalism – keep the former working class at a subsistence level just beneath angry, condemn generations to minimal expectations while an elite class accelerate in to the distance.

    Essentially develop an Epsilon class anticipated in Brave New World, with its own soma of multi-channel TV, cheap booze and fast food.

    Withdrawing benefits/ forcing people in to work, will provide a wake up call – a cold shower of awareness. It will provide people with a sense of self-responsibility and reintroduce them in to useful society.

    To refuse to work was illegal in the USSR – I do believe that contributing to society, be it as an astronaut or in a burger bar, should be the responsibility of every citizen.

  18. damon — on 19th June, 2011 at 10:14 am  

    I might agree Boyo, but am just saying the way it is.
    The hotels in central London employ legions of people of foriegn origin, and yet large numbers of young people who have left school in nearby boroughs have drifted into unemployment and become somewhat unemployable. Signing on and earning a bit extra from the black economy, such as working in night clubs at the weekend, or being a steward at football matches and concerts or some mini cab driving, is a whole lot more attractive than being a postman getting up at 4am and slogging about the roads in the early hours of the morning. Or being a put-upon dogsbody cleaning hotel rooms or washing the pots and dishes.

  19. Rumbold — on 19th June, 2011 at 10:18 am  

    Boyo:

    The elephant in the room is housing benefit. A number of people on JSA (which is relatively low, and flexible) are afraid of taking very low paid work because they think that their housing benefit will stop. It wouldn’t, and would just be pro-rated dependent on earnings, but most aren’t aware of this.

  20. Linda — on 19th June, 2011 at 2:31 pm  

    The government is operating a policy of divide and rule setting one group against another. The deserving v the undeserving benefit claimant. The private v the public sector on pensions and wages. The real disabled v the fraudsters. And so on.They are creating a race to the bottom for ordinary people. A smokescreen to justify their unnecessary cuts to public spending and a smokescreen to hide the greedy in society,eg bankers, business people, tax evaders and politicians etc.

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