Housing benefit fraud increased 50 per cent last three years

The Department for Work and Pensions (DWP) is under fire for allowing housing benefit fraud to proliferate for the past three years. At issue is the overpayments that have occurred on such a massive scale that it is driving up the costs of the entire programme.

In 2010-2011, it was estimated that some £980m was wasted on overpayments. The excess housing benefit paid out from 2013-2014 was announced to be £1.4b.

The fact that benefit fraud has increased by 50 per cent in such a short time has set off alarm bells at the National Audit Office, which first reported the amount of the overpayments. Taxpayers and local authorities are quick to point the blame at higher levels of government.

For its part, DWP claims that efforts to combat the fraud are working. They claim that actual money lost to error and fraud is dropping. This is in stark contrast to reports from the National Audit Office that reveal a 50 per cent increase in actual dollars wasted. The numbers do not lie, and the claims by DWP to the contrary are a bit confusing.

Deliberate acts to cheat the system are suspected by most taxpayers, but the cause of the overpayments is blamed on a much more benign cause. Most of the overpayments are blamed on claimant error, insinuating that benefit applicants were unaware that they were being overpaid. This explanation stretches the limits of the imagination though.

To deal with the issue, DWP has accelerated a review of those currently receiving housing benefit payments. They announced that benefit cheats would be identified and may face swift action.

Much of the problem is due to the sheer volume of citizens who are either receiving benefit payments or are applying for aid. Currently over five million households are in receipt of the payments, and demand has never been higher.

Efforts to stop the leakage are compounded by the difficulties in establishing which entity is responsible for policing the payments. DWP may be ultimately responsible, but it claims that local officials are not doing enough to stamp out fraud.