Less fortunate persons, or those finding themselves disadvantaged after losing a job, can rely on
support from the benefit system. It will allow them to maintain a reasonable standard of living
and hopefully provide the opportunity to reestablish their life.
Such is the size of the welfare bill that it is naturally a target for the fraudsters. The
authorities admit that over 1% of the £300 billion paid out in benefit is lost to fraud and
error. They suggest that 1% benefit mistakes isn't too bad! However, £3 billion is a massive
loss and may even be a substantial understatement.
Fraud is a hidden crime. It is always there, underneath the surface of everyday life. Nobody
really knows how much fraud there is until they can add up the losses that have been discovered.
Estimates of fraud that remains undetected can never be accurate.
This is true for benefit fraud, where the number of claimants is so large. Every single one of
the millions of claimants have circumstances that are continually changing. Not all of them will
disclose these changes to the authorities.
A single parent living alone who looks after an invalid child will be entitled to income support
to live on. Housing benefit will be claimed to cover rent and council tax. In addition,
invalidity living and care allowance will be available. If an estranged spouse returns to the
family home for a night, perhaps to visit the child, it is arguable that the lone parent's
circumstances have not changed. No mention of the visit will be made to the authorities.
However, if the spouse stays a bit longer and perhaps contributes something to his living costs,
there is a danger that the circumstances are changing. In stormy relationships, this can result
in an estranged spouse turning up form time to time, expecting somewhere to stay. He or she might
be working, and help out with bills or simply provide presents for the spouse and child.
It is possible that the couple reconciles, and the spouse starts living permanently back at home.
Now the line has been crossed by a long way, and such changes in circumstances should have been
reported. The single parent's circumstances have completely changed and there is another member
of the household who is working to consider.
Many single claimants do not disclose odd visits by an ex spouse, or the occasional sleepover by
a new boyfriend. They fear that even if the change does not impact their entitlement, the delays
in receiving benefit when the authorities consider how a claim might be affected will impact
their ability to pay for day to day essentials.
In the example of the single parent with an invalid child, the entitlement to income support and
probably housing benefit also would end when a new boyfriend came to stay. The invalidity
allowances should continue uninterrupted. However, if the new partner was on a low wage, it is
quite possible that the income support and housing benefit could be replaced, possibly entirely,
by child tax credits and working tax credits.
These benefits are assessed not on an individual but on the household income. Moreover, they are
substantially enhanced in cases where an invalid child is part of the family.
Rather than becoming part of the benefit overpayments resulting from fraud and error, the single
parent (now part of a household) should ensure that her full circumstances are reported to the
authorities promptly. It would help matters if the authorities, such as local councils and the
Department For Works and Pension, provide full details of the different benefits that might apply
in the case of changing circumstances.
If the amount of benefits lost is smaller than anticipated, sometimes nothing is lost, there may
be less incentive for a person to commit fraud and run the risk of criminal sanctions, which
these days will include substantial and harrowing confiscation proceedings following criminal
conviction.
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Mark Jenner is a Fellow of the Institute of Chartered Accountants, a Certified Fraud Examiner and
has a Masters Degree in Fraud Management. He specialises in fraud and crime and advises business
large and small on how to be secure from the fraudster =>http://www.mark-jenner.com
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