Benefit fraud in NI increases by 45% in four years
MLA calls for action as Stormont admits Covid could see figure increase even further
BENEFIT fraud has increased by 45% in just four years.
Figures from the Department for Communities show £65.3m of taxpayers’ money was lost to fraud in the last financial year.
This has jumped from £45.1m in 2015/16, according to the department’s annual report. Officials admit fraud is likely to rise further.
Due to a significant increase in claims as a result of the pandemic, DFC said the “easing of controls” to accommodate the claims “has the potential to lead to higher levels of fraud and error in 2020-21 which, in turn, needs to be properly measured to provide assurance to the Assembly over the administration of benefit expenditure”.
As well as money lost through customer fraud, millions have also been paid out due to errors on behalf of DFC officials and claimants.
In 2015/16, £8.7m was wrongly paid out due to customer error. This increased to £23.1m in 2019/20 — a rise of 166%.
Official error accounted for £25.1m in 2015/16 and £36.1m in 2018/19 — an increase of 44%.
It has been estimated that the value of benefit overpayments due to fraud and error in 2018/19 was £124m, and £35.3m for underpayments.
DFC noted that, over the course of five years: “Benefit expenditure has increased by 10% over this period, the estimated level of fraud and error has increased by 64%. This increase is partially attributable to changes arising from the introduction of Universal Credit and Personal Independence Payment.”
Alliance MLA Kellie Armstrong said action needed to be taken.
“Questions remain over the extent of benefit fraud, as the department has had a series of errors in recent years where they have overpaid claimants,” she said.
“These figures are pre-covid, when the benefit system changed to a remote system. I will be raising this issue with the department to ask if the fraud is the result of people moving to online.
“Benefit fraud impacts us all. We need to ensure remote systems are robust enough to prevent it, while simplifying forms to reduce errors and ensuring departments action effective measures to lift people out of poverty and have opportunities, instead of resorting to criminal activities.”
DFC acknowledged the increase in fraud in monetary terms, but said that is set against a context of increasing benefit expenditure.
“Spend in this area will vary from year-to-year as it is a needsbased service and people in need will receive benefits that they are entitled to,” it said.
“The more precise measurement is the percentage level of fraud in benefits, which was 1% in 2019, marginally higher than 0.8% in 2015. While overall this represents very low levels of fraud, the department recognises the significant levels of public expenditure that this represents.
“The department works to continually strengthen its capability and effectiveness in this area and to protect the integrity of the benefit system and the public funds that it manages.”
Elsewhere, £2.4bn was spent on state pensions in 2019/20, some 37% of Dfc’s total annual benefit expenditure.
It estimates that the level of state pension overpayments due to official error decreased by £200,000 compared to the previous year. However, underpayments due to official error “increased substantially in monetary terms and percentage of error” from £3.6m (0.2%) to £9.2m (0.4%).