Benefit chiefs are re-checking a million Universal Credit cases for possible fraud after overpayments almost doubled to £8.4billion during Covid.
Thousands of people face getting a “tap on the shoulder” this summer, a top director at the DWP warned after a surge in fraud and error.
Claimants who gave the wrong information in the heat of the pandemic risk being slapped with an “administrative penalty”, forcing them to repay any amounts they were wrongly given out of their future benefits.
The most serious cases of “egregious fraud” will face a criminal prosecution, said the DWP’s Universal Credit director-general Neil Couling.
He revealed the crackdown after overpayments due “fraud and error” rocketed from £4.6bn in the year to March 2020 to £8.4bn in the year to March 2021 – 3.9% of all benefit spending.
The rise, revealed in official statistics today, was driven almost entirely by a rise in fraud – from 1.4% of benefit spending to 3%.
By comparison, benefit underpayments rose only slightly from £2bn to £2.5bn.
Mr Couling said the DWP made an “active decision” to ease checks as face-to-face identification “just wasn’t possible”, but “we were still very alert to suspicious activity.”
Despite the record rise, he insisted “the proportion of cases committing fraud hasn’t gone up” because it accompanied a record rise in all claims.
Mr Couling insisted the exercise to re-check a million cases – around a sixth of all people on Universal Credit – would be “proportionate”.
It will involve, for example, re-verifying the identities of people who could not have face-to-face verification due to lockdown.
“These aren’t all fraudulent cases,” he told journalists. “These are just cases that didn’t get the full scrutiny… It’s not a heavy-handed thing we’re doing. We’re just checking the claim and checking the details.”
But he added: “We tagged every case that had come in where we couldn’t apply the kind of scrutiny we would normally do.
“We are part-way through an exercise – we’ll complete that exercise by the summer – of looking at all those cases and re-checking them.
“And some people in that exercise are getting a tap on the shoulder to say ‘ahem, something’s wrong with this case here, can you prove what’s gone on here?’.
“We will take corrective action on their case and if necessary, we will follow up with the full vigour of the law if we think there is really egregious fraud going on here.”
Mr Couling said “the government’s attempts to help people have been exploited by the minority who are engaging in fraudulent activity.”
But the scale of the exercise may spark fears of some being caught inadvertently due to a mistake they made in the middle of a pandemic.
Mr Couling said the DWP had already spotted more than 100,000 criminal frauds online and saved £1.7bn from that – including people who invented children, inflated their housing costs and changed their date of birth to be over 25.
Mr Couling admitted the average value of a fraudulent claim had risen and of the surge generally, he said: “We expected that would happen.
“The kind of surge we saw in claims was bound to have an outcome in terms of fraud and error… The priority then was to make sure the safety net could catch all those in need.”