FRAUD
Q 114-115. Subsidy reduction for Housing Benefit
The subsidy reduction of £48,000 referred to on page
31 of the Vote 2 account is not linked to local authorities' administration
of Housing Benefit. It is a penalty based on their failure to
successfully investigate benefit fraud.
A financial incentive scheme was introduced in April 1993
to encourage and reward local authorities to undertake successful
investigation of Housing Benefit and Council Tax Benefit fraud.
Local authorities can earn additional subsidy, or (from 1994-95)
have subsidy deducted, depending on savings achieved above weekly
benefit savings thresholds set by the Department.
Penalties were introduced as a last resort, to ensure that
those authorities which were not fully committed to protecting
the public purse were made aware of the consequences of their
failure to do so.
Q117. Prosecutions each year for each benefit
The Benefits Agency does not record statistics in this format
and cannot therefore provide these details.
Q117. Timetable and plan for the Post Office Order Book Control
Service
(paragraph 117, page 51)
Order Book Control Service is part of the ICL Pathway programme.
Its introduction nationally is therefore tied to the national
roll-out of the Payment Card systems. The Order Book Control Service
will become redundant once all benefits are paid by Payment Card.
Q117. What constitutes strongly suspected and confirmed fraud?
I enclose examples of levels 3 and 4 Income Support fraud
case histories which should give some indication of what is meant
by the various levels of suspected fraud.
Suspected Fraud Level 3—examples
— A fraud referral was received which indicated
that the customer was claiming as a lone parent but living with
a partner who was working. Initial enquiries revealed that the
customer and a male had both moved from the same previous address
to their current address. The customer did not respond to either
visits or letters so the claim was closed down. (Follow up work
was initiated in this case as there was doubts about the existence
of the customer).
— A lone parent customer admitted to the interviewing
officer that she was working part-time but that she had only worked
for one day recently, and earned less than £15.00. A check
with the employer revealed that the customer worked more frequently
than this but that she did not earn more than £15.00 weekly
(the earnings limit for a lone parent). However, the employer
paid the customer cash in hand and kept no wage records. The employer
was suspected to be collusive. Benefit remained in payment.
— An investigator had difficulty in tracing a customer
who had moved from her stated address. Her new address was eventually
uncovered with help from the customer's relatives. The computer
system indicated that the father of one of the customer's children
was also resident at the address. When the customer was interviewed
she stated that she lived alone with her children. Their father
had moved out but called occasionally to see them and collect
mail. She would not disclose his address. The investigator felt
that the couple were living together but could not prove it. The
investigator's attempts to interview the partner were unsuccessful.
Benefit remained in payment.
Suspected Fraud Level 4—examples
— Customer was a single parent with two children
living in her owner-occupied property. Following ineffective visits,
the investigator was informed by a neighbour that the customer
and her partner were away on holiday (the neighbour named the
partner). The customer was eventually interviewed but she denied
that she was living with anyone; however, when the partner's name
was put to her she was taken aback and said that she wanted to
discuss the matter with him. The customer's partner was also interviewed.
He stated that he only stayed at the customer's house off and
on but could not provide an alternative address. This customer
was also suspected of working. At the interview she stated that
she had started work the previous day in a cafe owned by her mother.
She informed the investigator that she would be working less than
16 hours a week and would be earning less than £15 weekly.
The customer withdrew her benefit claim.
— Following an ineffective visit to the house of
an unemployed single male, the customer signed off, stating he
would be starting work with his father. The investigator made
a follow up visit to the customer and was told by his mother that
customer had been working for his father "unofficially"
for some time but without pay! The whereabouts of the father was
not disclosed.
— Customer was claiming as a single parent. When
carrying out preview action the investigator noticed that the
computer system showed that the customer's husband was resident
at her address. When a visit was made, a neighbour told the investigator
that he did not know when the customer would be in, but that her
husband would be home around 7pm. When the customer was interviewed
she denied that her husband was living with her and said that
he came round to visit but she did not know where he lived. She
subsequently returned her order book to the local office, stating
that she and her husband were now living together.
Benefits Agency
15 May 1998
