In repsonse to many FAQs from our clients we have prepared our guide to Benefit Frauds. This is a general guide to the law and for advice on your specific case you should consult a lawyer.
How It Starts
You may be contacted by the Department for Work and Pensions, HM Revenue and Customs, the Service and Personnel and Veterans Agency, your local authority or the SFIS if you’re suspected of fraud.
You may be visited by Fraud Investigation Officers (FIOs) or asked to attend an interview to talk about your claim. Your benefit may be stopped while you’re investigated. You’ll get a letter telling about this if it happens.
What Can I be Accused of?
You may be accused of accepting an overpayment or benefit fraud.
The main benefit fraud offences that arise are:
· Failing to notify of a change in circumstances
· Failing to declare capital/ savings/assets.
· Making a false representation
· Allowing a claimant to furnish false particulars on a claim form
What Law Will I have Broken?
There are two main offences under the above act regarding fraudulent claims:
· Section 111 A Social Security Administration Act 1992- requires dishonesty
· Section 112 Social Security Administration Act 1992- no dishonesty
The Fraud Act and Theft Act is also used in some cases to prosecution benefit frauds:
· Section 1 Fraud Act 2006
· Section 17 Theft Act 1968
· Section 35 Tax Credits Act 2002
Who Will Investigate the Case and Prosecute?
Before 2014 there were three main departments that manage and process benefits and conduct investigations and prosecutions. Now all investigations are carried out by the Single Fraud Investigation Service (SFIS.)
Councils manage and administer Housing and Council Tax benefit.
The council also investigates potentially fraudulent claims for Housing and council tax benefit.
Eligibility criteria for HB and CTB:
Claimants who fall under one of the following categories are eligible for HB and CTB:
• Claimant is in receipt of a ‘passported benefit’
• Claimant is on low income
• Claimant has capital not exceeding the prescribed threshold (not more than £16,000).
Department of Work and Pensions
The Department of Work and Pensions (DWP) are responsible for the assessment and management of the following benefits:
• Income Support
• Job seekers allowance (contribution and non contribution based)
• Employment Support Allowance (replaces Incapacity benefit)
• Disability Living Allowance
• Pension Credits
• Child Benefit
The Department of Work and Pensions will investigate fraudulent claims in respect of the above benefits.
HM Revenue and Customs
HM Revenue and Customs are responsible for the assessment and management of:
• Child Tax Credits
• Working Tax Credits
HM Revenue and Customs have the power to investigate fraudulent claims of benefits but often work in partnership with the DWP.
What Offence Will I Be investigated For?
The Investigating Agency will let you know which offence they wish to question you about.
You should be aware that an investigation for an overpayment for one benefit may trigger enquiries about other linked passport benefits.
What are passported benefits?
Passported benefits are benefits which are payable to claimants on the basis of their entitlement to specific benefits or tax credits. These benefits passport an individual to other benefits and schemes.
The following benefits are passported benefits:
• Income Support
• Jobseekers Allowance (Income Based)
• Employment and Support Allowance (income-related)
• Pension Credit (Guarantee credit)
• Child Tax Credit
If you are in receipt of Housing and Council Tax benefit you may also be eligible for the following:
• Full Housing Benefit based on their eligible rent
• Full Council Tax benefit
• Full Child tax Credit if the claimant has dependant children of who they are in receipt of Child benefit.
The claimant will not need to provide proof of any other income or capital while they are entitled to any passported benefits however are under an obligation to advise the DWP of any changes to their circumstances.
Alternatives to Prosecution
see our Benefit Fraud page. Specialist advice is essential to anyone accused of an overpayment or benefit fraud.
The agency investigating a case will have its own policy setting when an individual should be prosecuted or offered an alternative to prosecution.
An experienced lawyer, familiar with the benefit fraud prosecuting policies of the investigating agencies may be able to intervene and persuade the not to proceed.
What are the Alternatives to Prosecution
There are various sanctions available if it an offence has been committed.
1. No Action
This is a very rare sanction which is only ever utilised if the Council/DWP concede that the overpayment in benefits resulted from an official error.
Cautions are now only available to local borough councils. A caution for the purposes of a benefit fraud investigation is not a formal police caution and will therefore NOT appear on a CRB check.
3. Administrative Penalty
An administrative penalty (Ad Pen) is an offer to pay a financial penalty.
When Will an Alternative to Prosecution Be Considered?
You should consult a lawyer for specialist advice. The factors that are relevant vary from case to case and every agency has a different policy.
What Factors Will be Considered When Deciding Whether to Prosecute?
When deciding if there should be a prosecution the CPS guidelines must be considered. Even at this stage a specialist lawyer may be able to persuade the investigating agency not to prosecute.
Factors that will be taken into account include, amongst others;
1. The total overpayment (is the figure over the threshold)
2. Denials during the interview under caution
3. Length of period of the overpayment or fraud
What Happens During An Investigation?
The first time you will be aware of the investigation is when the agency write to you asking you to attend an interview. You will be told that you have the right to be represented by a lawyer and there is legal aid funding available for this.
• However the investigation process begins well before the interview.
• By the time the interview takes place the agency will have obtained most of the information/evidence relevant to their case. In certain cases they may even have conducted surveillance evidence.
• At the interview you will be asked questions about your benefit claims. Yur lawyer will advise you on how to respond.
• After the interview you may receive an overpayment letter stating how much you owe. At this stage you must consult a lawyer as you have a month to appeal this decision.
• Your file may be sent to the CPS or prosecuting agency for a decision on whether to prosecute.
What happens after a benefit fraud investigation
If there’s evidence you’ve committed fraud, one or more of the following may happen:
you’re taken to court
you’re asked to pay a penalty (between £350 and £5,000) instead of going to court
your benefits are reduced or stopped
you’re told to pay back the overpaid money
Losing benefits if you’re convicted of fraud
Your benefits can be reduced or stopped for up to 3 years if you’re convicted of benefit fraud. The amount of time they’re stopped for depends on how many times you’ve committed fraud.
Only certain benefits can be reduced or stopped. These are called ‘sanctionable benefits’. But if you commit fraud on a benefit that can’t be reduced or stopped, your other benefits can be reduced instead.