Welfare Reform Bill (HL Bill 114)

(2) In section 190 of that Act (parliamentary control of orders and regulations), in
subsection (1), before paragraph (za) there is inserted—

“(zzb) regulations under section 115C(2) or 115D(1) or (2);”.

Loss of benefit

115 5Benefit offences: disqualifying and sanctionable benefits

(1) In the Social Security Fraud Act 2001, section 6A (meaning of “disqualifying
benefit” and “sanctionable benefit”) is amended as follows.

(2) In subsection (1), in the definition of “disqualifying benefit”, after paragraph
(e) there is inserted—

• “( f)

  child tax credit;

  (ii)

  working tax credit;”.

(3) 5In that subsection, in the definition of “sanctionable benefit”, after paragraph
(f) there is inserted—

• “( fa)

  child tax credit;

  (fb)

  working tax credit;”.

116 Benefit offences: period of sanction

(1) 10The Social Security Fraud Act 2001 is amended as follows.

(2) Section 6B (loss of benefit in case of conviction, penalty or caution for benefit
offence) is amended as follows.

(3) In subsection (11), for “the period of four weeks” there is substituted “the
relevant period”.

(4) 15After subsection (11) there is inserted—

“(11A) For the purposes of subsection (11) the relevant period is—

(a) in a case falling within subsection (1)(a) where the benefit
offence, or one of them, is a relevant offence, the period of three
years,

(b) 20in a case falling within subsection (1)(a) (but not within
paragraph (a) above)), the period of 13 weeks, or

(c) in a case falling within subsection (1)(b) or (c), the period of four
weeks.”

(5) After subsection (13) there is inserted—

“(14) 25In this section and section 7 “relevant offence” means—

(a) in England and Wales, the common law offence of conspiracy to
defraud, or

(b) a prescribed offence which, in the offender’s case, is committed
in such circumstances as may be prescribed, and which, on
30conviction—

(i) is found by the court to relate to an overpayment (as
defined in section 115A(8) of the Administration Act) of
at least £50,000,

(ii) is punished by a custodial sentence of at least one year
35(including a suspended sentence as defined in section
189(7)(b) of the Criminal Justice Act 2003), or

(iii) is found by the court to have been committed over a
period of at least two years.”

(6) After subsection (14) (inserted by subsection (5) above) there is inserted—

“(15) 40The Secretary of State may by order amend subsection (11A)(a), (b) or
(c), or (14)(b)(i), (ii) or (iii) to substitute a different period or amount for
that for the time being specified there.”

(7) In section 7 (loss of benefit for second or subsequent conviction of benefit

offence), after subsection (1) there is inserted—

“(1A) The following restrictions do not apply if the benefit offence referred to
in subsection (1)(a), or any of them, is a relevant offence.”

(8) In section 11 (loss of benefit regulations)—

(a) 5in the heading, after “benefit” there is inserted “orders and”;

(b) in subsection (3) at the end there is inserted—

“(e) regulations under section 6B(14) or an order under
section 6B(15), or”;

(c) in subsection (4) after “make”, in both places, there is inserted “an order
10or”.

117 Benefit offences: sanctions for repeated benefit fraud

(1) The Social Security Fraud Act 2001 is amended as follows.

(2) In section 6B (loss of benefit in case of conviction, penalty or caution for benefit
offence), in subsection (3) for “later” there is substituted “current”.

(3) 15Section 7 (loss of benefit for second or subsequent conviction of benefit offence)
is amended as follows.

(4) In the heading, for “second or subsequent conviction of benefit offence” there
is substituted “repeated benefit fraud”.

(5) For subsection (1)(a) to (e) there is substituted—

“(a) 20a person (“the offender”) is convicted of one or more benefit
offences in a set of proceedings (“the current set of
proceedings”),

(b) within the period of five years ending on the date on which the
benefit offence was, or any of them were, committed, one or
25more disqualifying events occurred in relation to the offender
(the event, or the most recent of them, being referred to in this
section as “the earlier disqualifying event”),

(c) the current set of proceedings has not been taken into account
for the purposes of any previous application of this section or
30section 8 or 9 in relation to the offender or any person who was
then a member of his family,

(d) the earlier disqualifying event has not been taken into account
as an earlier disqualifying event for the purposes of any
previous application of this section or either of those sections in
35relation to the offender or any person who was then a member
of his family, and

(e) the offender is a person with respect to whom the conditions for
an entitlement to a sanctionable benefit are or become satisfied
at any time within the disqualification period,”.

(6) 40In subsection (6), for the words from “in relation to” to the end, there is
substituted “in an offender’s case, means the relevant period beginning with a
prescribed date falling after the date of the conviction in the current set of
proceedings”.

(7) After that subsection there is inserted—

“(6A) 45For the purposes of subsection (6) the relevant period is—

(a) in a case where, within the period of five years ending on the
date on which the earlier disqualifying event occurred, a
previous disqualifying event occurred in relation to the
offender, the period of three years;

(b) 5in any other case, 26 weeks.”

(8) After subsection (7) there is inserted—

“(7A) Subsection (7B) applies where, after the agreement of any person (“P”)
to pay a penalty under the appropriate penalty provision is taken into
account for the purposes of the application of this section in relation to
10that person—

(a) P’s agreement to pay the penalty is withdrawn under
subsection (5) of the appropriate penalty provision,

(b) it is decided on an appeal or in accordance with regulations
under the Social Security Act 1998 or the Social Security
15(Northern Ireland) Order 1998 (S.I. 1998/1506 (N.I. 10)S.I. 1998/1506 (N.I. 10)) that any
overpayment to which the agreement relates is not recoverable
or due, or

(c) the amount of any overpayment to which the penalty relates is
revised on an appeal or in accordance with regulations under
20the Social Security Act 1998 or the Social Security (Northern
Ireland) Order 1998 and there is no new agreement by P to pay
a penalty under the appropriate penalty provision in relation to
the revised overpayment.

(7B) In those circumstances, all such payments and other adjustments shall
25be made as would be necessary if no restriction had been imposed by
or under this section that could not have been imposed if P had not
agreed to pay the penalty.”

(9) In subsection (8), the following definitions are inserted at the appropriate
places—

• 30““appropriate penalty provision” has the meaning given in section
  6B(2)(a);”

• ““disqualifying event” has the meaning given in section 6B(13).”

(10) After that subsection there is inserted—

“(8A) Where a person is convicted of more than one benefit offence in the
35same set of proceedings, there is to be only one disqualifying event in
respect of that set of proceedings for the purposes of this section and—

(a) subsection (1)(b) is satisfied if any of the convictions take place
in the five year periods mentioned there;

(b) the event is taken into account for the purposes of subsection
40(1)(d) if any of the convictions have been taken into account as
mentioned there;

(c) in the case of the earlier disqualifying event mentioned in
subsection (6A)(a), the reference there to the date on which the
earlier disqualifying event occurred is a reference to the date on
45which any of the convictions take place;

(d) in the case of the previous disqualifying event mentioned in
subsection (6A)(a), that provision is satisfied if any of the
convictions take place in the five year period mentioned there.”

(11) After subsection (10) there is inserted—

“(10A) The Secretary of State may by order amend subsection (6A) to
substitute different periods for those for the time being specified there.

(10B) An order under subsection (10A) may provide for different periods to
5apply according to the type of earlier disqualifying event or events
occurring in any case”.

(12) In section 11 (loss of benefit regulations), in subsection (3), after paragraph (e)
(as inserted by section 116 above) there is inserted—

“(f) an order under section 7(10A),”.

118 10Loss of tax credits

(1) The Tax Credits Act 2002 is amended as follows.

(2) After section 36 there is inserted—

“Loss of tax credit provisions

36A Loss of working tax credit in case of conviction etc for benefit offence

(1) 15Subsection (4) applies where a person (“the offender”)—

(a) is convicted of one or more benefit offences in any proceedings,
or

(b) after being given a notice under subsection (2) of the
appropriate penalty provision by an appropriate authority,
20agrees in the manner specified by the appropriate authority to
pay a penalty under the appropriate penalty provision to the
appropriate authority, in a case where the offence to which the
notice relates is a benefit offence, or

(c) is cautioned in respect of one or more benefit offences.

(2) 25In subsection (1)(b)—

(a) “the appropriate penalty provision” means section 115A of the
Social Security Administration Act 1992 (penalty as alternative
to prosecution) or section 109A of the Social Security
Administration (Northern Ireland) Act 1992 (the corresponding
30provision for Northern Ireland);

(b) “appropriate authority” means—

(i) in relation to section 115A of the Social Security
Administration Act 1992, the Secretary of State or an
authority which administers housing benefit or council
35tax benefit, and

(ii) in relation to section 109A of the Social Security
Administration (Northern Ireland) Act 1992, the
Department (within the meaning of that Act) or the
Northern Ireland Housing Executive.

(3) 40Subsection (4) does not apply by virtue of subsection (1)(a) if, because
the proceedings in which the offender was convicted constitute the
current set of proceedings for the purposes of section 36C, the
restriction in subsection (3) of that section applies in the offender’s case.

(4) If this subsection applies and the offender is a person who would, apart
from this section, be entitled (whether pursuant to a single or joint
claim) to working tax credit at any time within the disqualification
period, then, despite that entitlement, working tax credit shall not be
5payable for any period comprised in the disqualification period—

(a) in the case of a single claim, to the offender, or

(b) in the case of a joint claim, to the offender or the other member
of the couple.

(5) Regulations may provide in relation to cases to which subsection (4)(b)
10would otherwise apply that working tax credit shall be payable, for any
period comprised in the disqualification period, as if the amount
payable were reduced in such manner as may be prescribed.

(6) For the purposes of this section, the disqualification period, in relation
to any disqualifying event, means the relevant period beginning with
15such date, falling after the date of the disqualifying event, as may be
determined by or in accordance with regulations.

(7) For the purposes of subsection (6) the relevant period is—

(a) in a case falling within subsection (1)(a) where the benefit
offence, or one of them, is a relevant offence, the period of three
20years,

(b) in a case falling within subsection (1)(a) (but not within
paragraph (a) above)), the period of 13 weeks, or

(c) in a case falling within subsection (1)(b) or (c), the period of 4
weeks.

(8) 25The Treasury may by order amend subsection (7)(a), (b) or (c) to
substitute a different period for that for the time being specified there.

(9) This section has effect subject to section 36B.

(10) In this section and section 36B—

• “benefit offence” means any of the following offences committed
  30on or after the day specified by order made by the Treasury—

  (a)

  an offence in connection with a claim for a disqualifying
  benefit;

  (b)

  an offence in connection with the receipt or payment of
  any amount by way of such a benefit;

  (c)

  35an offence committed for the purpose of facilitating the
  commission (whether or not by the same person) of a
  benefit offence;

  (d)

  an offence consisting in an attempt or conspiracy to
  commit a benefit offence;

• 40“disqualifying benefit” has the meaning given in section 6A(1) of
  the Social Security Fraud Act 2001;

• “disqualifying event” means—

  (a)

  the conviction falling within subsection (1)(a);

  (b)

  the agreement falling within subsection (1)(b);

  (c)

  45the caution falling within subsection (1)(c);

• “relevant offence” has the meaning given in section 6B of the Social
  Security Fraud Act 2001.

36B Section 36A: supplementary

(1) Where—

(a) 50the conviction of any person of any offence is taken in account
for the purposes of the application of section 36A in relation to
that person, and

(b) that conviction is subsequently quashed,

all such payments and other adjustments shall be made as would be
55necessary if no restriction had been imposed by or under section 36A
that could not have been imposed if the conviction had not taken place.

(2) Where, after the agreement of any person (“P”) to pay a penalty under
the appropriate penalty provision is taken into account for the
purposes of the application of section 36A in relation to that person—

(a) 60P’s agreement to pay the penalty is withdrawn under
subsection (5) of the appropriate penalty provision, or

(b) it is decided on an appeal or in accordance with regulations
under the Social Security Act 1992 or the Social Security
(Northern Ireland) Order 1998 (S.I. 1998/1506 (N.I. 10)S.I. 1998/1506 (N.I. 10)) that the
65overpayment to which the agreement relates is not recoverable
or due,

all such payments and other adjustments shall be made as would be
necessary if no restriction had been imposed by or under section 36A
that could not have been imposed if P had not agreed to pay the
70penalty.

(3) Where, after the agreement (“the old agreement”) of any person (“P”) to
pay a penalty under the appropriate penalty provision is taken into
account for the purposes of the application of section 36A in relation to
P, the amount of any overpayment made to which the penalty relates is
75revised on an appeal or in accordance with regulations under the Social
Security Act 1998 or the Social Security (Northern Ireland) Order
1998—

(a) section 36A shall cease to apply by virtue of the old agreement,
and

(b) 80subsection (4) shall apply.

(4) Where this subsection applies—

(a) if there is a new disqualifying event consisting of—

(i) P’s agreement to pay a penalty under the appropriate
penalty regime in relation to the revised overpayment,
85or

(ii) P being cautioned in relation to the offence to which the
old agreement relates,

the disqualification period relating to the new disqualifying
event shall be reduced by the number of days in so much of the
90disqualification period relating to the old agreement as had
expired when subsection 36A ceased to apply by virtue of the
old agreement, and

(b) in any other case, all such payments and other adjustments shall
be made as would be necessary if no restriction had been
95imposed by or under section 36A that could not have been
imposed if P had not agreed to pay the penalty.

(5) For the purposes of section 36A—

(a) the date of a person’s conviction in any proceedings of a benefit
offence shall be taken to be the date on which the person was
found guilty of that offence in those proceedings (whenever the
person was sentenced) or in the case mentioned in paragraph
5(b)(ii) the date of the order for absolute discharge, and

(b) references to a conviction include references to—

(i) a conviction in relation to which the court makes an
order for absolute or conditional discharge,

(ii) an order for absolute discharge made by a court of
10summary jurisdiction in Scotland under section 246(3)
of the Criminal Procedure (Scotland) Act 1995 without
proceeding to a conviction, and

(iii) a conviction in Northern Ireland.

(6) In this section “the appropriate penalty provision” has the meaning
15given by section 36A(2)(a).

36C Loss of working tax credit for repeated benefit fraud

(1) If—

(a) a person (“the offender”) is convicted of one or more benefit
offences in a set of proceedings (“the current set of
20proceedings”),

(b) within the period of five years ending on the date on which the
benefit offence was, or any of them were, committed, one or
more disqualifying events occurred in relation to the offender
(the event, or the most recent of them, being referred to in this
25section as “the earlier disqualifying event”),

(c) the current set of proceedings has not been taken into account
for the purposes of any previous application of this section in
relation to the offender,

(d) the earlier disqualifying event has not been taken into account
30as an earlier disqualifying event for the purposes of any
previous application of this section in relation to the offender,
and

(e) the offender is a person who would, apart from this section, be
entitled (whether pursuant to a single or joint claim) to working
35tax credit at any time within the disqualification period,

then, despite that entitlement, the restriction in subsection (3) shall
apply in relation to the payment of that benefit in the offender’s case.

(2) The restriction in subsection (3) does not apply if the benefit offence
referred to in subsection (1)(a), or any of them, is a relevant offence.

(3) 40Working tax credit shall not be payable for any period comprised in the
disqualification period—

(a) in the case of a single claim, to the offender, or

(b) in the case of a joint claim, to the offender or the other member
of the couple.

(4) 45Regulations may provide in relation to cases to which subsection (3)(b)
would otherwise apply that working tax credit shall be payable, for any
period comprised in the disqualification period, as if the amount
payable were reduced in such manner as may be prescribed.

(5) For the purposes of this section the disqualification period, in an
offender’s case, means the relevant period beginning with a prescribed
date falling after the date of the conviction in the current set of
proceedings.

(6) 5For the purposes of subsection (5) the relevant period is—

(a) in a case where, within the period of five years ending on the
date on which the earlier disqualifying event occurred, a
previous disqualifying event occurred in relation to the
offender, the period of three years;

(b) 10in any other case, 26 weeks.

(7) In this section and section 36D—

• “appropriate penalty provision” has the meaning given in section
  36A(2)(a);

• “benefit offence” means any of the following offences committed
  15on or after the day specified by order made by the Treasury—

  (a)

  an offence in connection with a claim for a disqualifying
  benefit;

  (b)

  an offence in connection with the receipt or payment of
  any amount by way of such a benefit;

  (c)

  20an offence committed for the purpose of facilitating the
  commission (whether or not by the same person) of a
  benefit offence;

  (d)

  an offence consisting in an attempt or conspiracy to
  commit a benefit offence;

• 25“disqualifying benefit” has the meaning given in section 6A(1) of
  the Social Security Fraud Act 2001;

• “disqualifying event” has the meaning given in section 36A(10);

• “relevant offence” has the meaning given in section 6B of the Social
  Security Fraud Act 2001.

(8) 30Where a person is convicted of more than one benefit offence in the
same set of proceedings, there is to be only one disqualifying event in
respect of that set of proceedings for the purposes of this section and—

(a) subsection (1)(b) is satisfied if any of the convictions take place
in the five year period there;

(b) 35the event is taken into account for the purposes of subsection
(1)(d) if any of the convictions have been taken into account as
mentioned there;

(c) in the case of the earlier disqualifying event mentioned in
subsection (6)(a), the reference there to the date on which the
40earlier disqualifying event occurred is a reference to the date on
which any of the convictions take place;

(d) in the case of the previous disqualifying event mentioned in
subsection (6)(a), that provision is satisfied if any of the
convictions take place in the five year period mentioned there.

(9) 45The Treasury may by order amend subsection (6) to substitute different
periods for those for the time being specified there.

(10) An order under subsection (9) may provide for different periods to
apply according to the type of earlier disqualifying event or events
occurring in any case.

(11) This section has effect subject to section 36D.

36D Section 36C: supplementary

(1) Where—

(a) the conviction of any person of any offence is taken into account
5for the purposes of the application of section 36C in relation to
that person, and

(b) that conviction is subsequently quashed,

all such payments and other adjustments shall be made as would be
necessary if no restriction had been imposed by or under section 36C
10that could not have been imposed if the conviction had not taken place.

(2) Subsection (3) applies where, after the agreement of any person (“P”) to
pay a penalty under the appropriate penalty provision is taken into
account for the purposes of the application of section 36C in relation to
that person—

(a) 15P’s agreement to pay the penalty is withdrawn under
subsection (5) of the appropriate penalty provision,

(b) it is decided on an appeal or in accordance with regulations
under the Social Security Act 1998 or the Social Security
(Northern Ireland) Order 1998 (S.I. 1998/1506 (N.I. 10)S.I. 1998/1506 (N.I. 10)) that any
20overpayment made to which the agreement relates is not
recoverable or due, or

(c) the amount of any over payment to which the penalty relates is
revised on an appeal or in accordance with regulations under
the Social Security Act 1998 or the Social Security (Northern
25Ireland) Order 1998 and there is no new agreement by P to pay
a penalty under the appropriate penalty provision in relation to
the revised overpayment.

(3) In those circumstances, all such payments and other adjustments shall
be made as would be necessary if no restriction had been imposed by
30or under section 36C that could not have been imposed if P had not
agreed to pay the penalty.

(4) For the purposes of section 36C—

(a) the date of a person’s conviction in any proceedings of a benefit
offence shall be taken to be the date on which the person was
35found guilty of that offence in those proceedings (whenever the
person was sentenced) or in the case mentioned in paragraph
(b)(ii) the date of the order for absolute discharge, and

(b) references to a conviction include references to—

(i) a conviction in relation to which the court makes an
40order for absolute or conditional discharge,

(ii) an order for absolute discharge made by a court of
summary jurisdiction in Scotland under section 246(3)
of the Criminal Procedure (Scotland) Act 1995 without
proceeding to a conviction, and

(iii) 45a conviction in Northern Ireland.

(5) In section 36C references to any previous application of that section—

(a) include references to any previous application of a provision
having an effect in Northern Ireland corresponding to provision
made by that section, but

(b) do not include references to any previous application of that
section the effect of which was to impose a restriction for a
period comprised in the same disqualification period.”