The annual statistics for fraud and error in the benefit system for the financial year ending 2023 were published on Thursday 11 May 2023, at 9.30 am.
Today’s figures confirm that fraud and error in 2022-23 fell to 3.6% of welfare expenditure. This includes a reduced rate of both fraudulent overpayments at 2.7% (£6.4 billion) and claimant error at 0.6% (£1.4 billion). The rate of official error has remained the same at 0.3% (£0.6 billion), whilst the rate of underpayments has increased by 0.2 percentage points to 1.4% (£3.3 billion).
This fall in the value of fraud and error shows that our plan for fighting fraud in the welfare system is working. This is a positive step in the right direction after an increase in fraud and error during the pandemic, but there is more to do.
Prior to the pandemic, fraud and error rates across the welfare system were falling. This was driven by our action to prevent fraud from entering the system and to detect and recover it when it does. At the outset of the pandemic, we took the right and necessary decisions to protect millions of people who suddenly required our support. This meant we eased some of our control measures to manage the surge in universal credit claims and pay people in need on time. While this allowed the Department to process millions of universal credit (UC) claims in the first weeks of the pandemic, unfortunately this was exploited by some.
Our fraud plan, “Fighting Fraud in the Welfare System”, which we published last year and is backed by £900 million of funding, sets out how we are stepping up our approach to drive out fraud and error from the welfare system.
We have already revisited and reinstated our normal checks and assurances that were eased over the pandemic. The return of our defences has had a positive impact in preventing fraudulent claims, and this is now starting to be reflected in the fraud and error statistics, as published today. We also continuously improve our systems to keep pace with fast-evolving criminal tactics. From our findings we are implementing policy and technological solutions, including enhanced verification and improved customer communications.
We have continued to build on our effective counter-fraud function. This focuses on individual and organised crime threats meaning we can disrupt attacks on the system by both individuals and organised gangs, stopping criminals taking from those who need this support.
As part of our plan, we will review millions of UC claims over the next five years by way of targeted case reviews. This will see the DWP review cases that are at risk of being incorrect, clearing the stock of fraud and error that entered during the height of the pandemic and addressing any overpayments or underpayments, ensuring claimants receive the right amount.
Finally, as our fraud plan set but, when parliamentary time allows, we plan to introduce a new range of powers to strengthen our ability to tackle fraud and error in the benefits system. This includes: strengthening our penalty regime by introducing a new civil penalty for cases of fraud, which will help act as a deterrent; a requirement for organisations such as banks to share data securely on an increased scale to help us check levels of savings and whether claimants are living abroad; and to support us to tackle serious and organised crime, increase DWP officers’ powers to conduct searches, seize evidence and make arrests, giving fraudsters no place to hide.
Fraud is a major issue, but we are also taking further steps to minimise errors, ensuring the right people are paid the right amount at the right time. For personal independence payment, we ask all claimants in our key communications with them to inform us if their condition has changed for better or worse. We would encourage anyone who thinks their condition has changed to get in touch so that we can review their case and ensure we pay them the right amount. Details on how to get in touch are available at Personal Independence Payment (PIP): Change of circumstances - gov.uk (
www.gov.uk).For the state pension, our legal entitlements administrative practice (LEAP) exercise continues to identify and reimburse those people affected by historic underpayments. We also continue to work closely with HMRC, to understand more about the scale, potential causes, and options to correct historical errors relating to home responsibilities protection.
We will report more on both overpayments and underpayments by way of our annual report and accounts, which are due to be published early in July 2023.
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