Universal Credit and other state benefits could see a jump in demand over the coming months as a new coronavirus variant looms and economic problems persist. This could also raise the prevalence of fraud and errors in the system, an issue the DWP is already struggling with.
According to data from the DWP, more than 20 million people in the UK are claiming benefits or state pensions from the Government. Earlier this year, the DWP also announced fraud and error in the benefits system reached record highs, with £8.4billion being overpaid over the last financial year.
In total, this amounted to 3.9 percent of benefit payments being overpaid, the highest rate to date. Additionally, around £6.3billion of these overpayments were believed to be the result of fraudulent activity.
A DWP spokesperson commented on the figures: “We also have robust plans in place to recover fraudulent claims and drive fraud and error down to the lowest feasible level.”
Additionally, Neil Couling, the Director General at the DWP, also noted many claimants could be approached as the Government focuses on its fraud and error efforts.
The DWP gets tough
In recent months, it’s become clear that the Government is focusing on streamlining the benefit claiming system. In November, it emerged that the DWP was cracking down on anyone who failed to provide evidence of their identity to support their Universal Credit claim.
Many Britons were not able to do this during the pandemic and as such, the need for face-to-face was reduced. However, the DWP has been rectifying this slowly as the UK began to recover but claims have been made that the DWP has been demanding repayments from those who failed to respond to a request for evidence.
While many of these claimants may have a legitimate reason for not supplying the evidence, the DWP, reportedly, has been closing claims and/or making automatic deductions.
This was criticised at the time by the Child Poverty Action Group which argued legitimate claimants are being penalised.
Claire Hall, a solicitor at the charity, commented: “Just as families are getting back on their feet, many of those who lost their jobs when the pandemic first hit are being put through a second ordeal by the DWP.
“Despite making legitimate claims for Universal Credit over 18 months ago, people have now received financially devastating debt notices simply because they haven’t been able to comply with requests to verify their details quickly.”
Ms Hall urged the DWP to review these cases and suspend collection of the ‘so called debts’ until it has managed to look into it properly.
In response, a DWP spokesperson said: “At the onset of the pandemic we suspended certain verification processes as we could no longer see customers face-to-face, making customers aware that we may return to seek this verification in the future.
“Those who can prove entitlement in a reasonable timeframe will not be asked to repay any money.
“We have a responsibility to the taxpayer to ensure public money is properly spent. Therefore it is right and lawful that we seek to recover payments that claimants were not entitled to.
“We have been unable to verify the details of these case studies as we have not been provided with the required information. We can do so if this is provided.”
Covid scheme fraud
On top of benefits, the Government is also set to focus its resources on recouping funds from coronavirus support themed fraud. Specifically, many experts expect fraud within the furlough scheme will end up costing the UK billions.
Official data from HMRC showed furlough themed fraudulent activity rose to nearly 30,000 cases and in July Jesse Norman, the Financial Secretary for HM Treasury, confirmed the Government had opened at least 6,150 inquiries into suspected overpayments due to error or fraud.
Rishi Sunak also acknowledged these difficulties in his Spring Budget.
The Chancellor said: “We’ll also tackle fraud in our Covid schemes, with £100million to set up a new HMRC taskforce of around 1,000 investigators as well as new measures, and new investment in HMRC, to clamp down on tax avoidance and evasion.”