David Cameron today unveiled plans to recruit private firms to help track down fraudulent benefit claims, in the hope of reducing the £1.5 billion lost by taxpayers to benefit fraud every year.

The use of credit check records in benefit fraud cases is already common practice and can be useful from the point of seeing if someone has applied for loans, credit cards and mortgages, either individually or with a partner. 

The information available from companies such as Experian would, as you can imagine, be of much value to Government agencies such as the DWP or HMRC in ascertaining whether a claim was genuine or not, so I'm not altogether surprised that the Government are considering using private firms to combat benefit fraud. 

The trouble is that it isn't just fraud that is the problem, its error as well. This is also unsurprising given the complexity of the system. Claimants, a lot of the time, have no idea why they get the benefits and tax credits they get, and I'm sure lots of people get caught up in 'fraud' accusations when actually it's just not knowing why they get what they get and a general lack of awareness of what the actual benefits rules are.

There is also the other side of the coin - DWP and HMRC decision makers (and their computer systems!) make regular mistakes when calculating benefits and tax credit entitlement. Experian say that they expect to receive a bounty payment if they uncover a fraud case. Wouldn't it be great if the advice sector could claim a 'bounty payment' from the Government when we uncover errors that the DWP and HMRC have made!?

I would like the Government to consider a 'benefits amnesty' to help those unsure if their current benefit and tax credit entitlement is correct. Claimants that are worried about their current claims could have their benefits payments and relevant circumstances checked by independent advice services such as IncomeMAX, CAB, Advice UK Member Centres and Law Centres etc. If the amnesty check highlighted that benefit payments were incorrect, the advice service could take steps to ensure that benefit claims were stopped and that no fraud action was taken.

I think a ‘Benefits Amnesty’ would be particularly useful for lone parents that now lived with a partner, disability cases where health had improved and also those that are not currently declaring work earnings. 

I think fear is such a massive part of the problem, so while the Government are at this point, i.e. re-affirming what the system is there for and who it is designed to help, and also before we get too far down the line of welfare reform, why not give people a fair chance to check if their benefits are correct and the chance to give them back without fear of prosecution?

That way we can start with a clean slate, the welfare benefits system can be reformed, the people that are genuinely claiming benefits can relax and the Government can crack down on those knowingly committing fraud.

Here is the BBC story on the topic. Let me know what you think.


Lee Healey

IncomeMAX Managing Director