DWP just warned it is going to “go further” on benefit fraud

The Department for Work and Pensions (DWP) has once again seized the spotlight for its relentless focus on benefit fraud and error—but the numbers tell a strikingly different story.

Despite fraud rates hovering at relatively low single-digit levels, the department continues to brandish fraud as though it’s a scourge of epidemic proportions, all while turning a blind eye to far more significant financial leaks elsewhere—most notably in corporate tax avoidance and tax evasion by the super rich.

DWP fraud and error: latest figures

As Civil Service World reported, DWP annual accounts show the fraud-and-error rate dipped to 3.3% in 2024-25, down from 3.6% the previous year. It noted that:

According the annual report and accounts, DWP paid out £290.8bn in benefits and the state pension in the year to 31 March 2025.

Of that figure, a total of £9.3bn related to overpaid benefits and £200m was overpaid state pension. In 2023-24, the figure for overpaid benefits was £9.7bn.

Universal Credit accounted for two-thirds of all benefits overpayments in 2024-25, according to the Office for National Statistics. However, the overpayment rate for Universal Credit dropped to 9.7% in 2024-25, down from 12.4% the previous year.

Of course, this is not the full story at all. As the Canary has consistently reported, benefit fraud is largely non-existent.

Not all that it seems

For instance, the Canary’s Steve Topple has previously underscored how a sizeable proportion of the DWP’s fraud estimates are not in fact from actual claimants at all. Instead, Topple has detailed how much of the billions the DWP promotes as fraud (and that the media dutifully laps up) is just based on assumptions and guesswork.

For example, the DWP’s own methodology organises fraud into various categories. It states that:

Any Fraud that is Causal Link (Low Suspicion) has been re-categorised to a new category of “Failure to provide evidence/fully engage in the process”. Cases with an error in this new category have forgone their full benefit entitlement rather than engage in the benefit review process. We therefore make the assumption that the claim was fraudulent, even though the reason for their non-engagement is not clear.

So, the DWP assumes this category is fraud  – without any evidence to back it up. Its own figures show that this accounted for over half a billion pounds in 2020/21.

Then, take Personal Independence Payment (PIP). The Canary’s Rachel Charlton-Dailey recently pointed out that the government’s own data found that cases of PIP fraud were next-to-nothing at just 0.1%. Funnily enough, as Charlton-Dailey also highlighted, the DWP were a little quiet on this:

When they made a massive stab-vested song and dance about DWP fraud decreasing in 2023, you have to wonder why they aren’t shouting from the rooftops that PIP fraud is now at 0%. The only conclusion to be reached is that low-or-no DWP benefit fraud doesn’t fit their narrative of how much disabled people are wasting taxpayers money. So nothing to see here.

Unfortunately then, it never actually matters that the proportion of fraud in the benefits system is infinitesimally small. Government’s will continue to push the idea that it is a major problem.

Under the Labour Party’s proposed Fraud, Error, and Recovery Bill, the DWP is poised to gain extensive powers aimed at tackling the right-wing myth of benefit fraud. This bill, currently being deliberated in Parliament, introduces significant changes in how the DWP will handle allegations of fraud among benefit claimants, including those on schemes such as Personal Independence Payments (PIP).

DWP powers over ‘fraud’: what’s happening?

The proposed legislation would compel banks and other financial institutions to cooperate with the government by sharing specific data to assist in identifying potential fraud cases.

However, the DWP has stated that it will not have direct access to individuals’ bank accounts, nor will it share personal information with third parties. A spokesperson emphasised that the steps taken are solely aimed at safeguarding public funds.

They argued that the bill is projected to save taxpayers £1.5 billion over the next five years as part of broader plans aimed at reducing welfare expenditure.

Critics of the bill have raised concerns about its intrusiveness and potential for misuse. Jasleen Chaggar from Big Brother Watch highlighted that the reach of surveillance does not stop with benefit claimants:

Even if you are a benefits recipient, you can appoint an individual, a parent, a guardian, an appointed person or your landlord, to receive the benefit on your behalf, so those people will also be pulled into the net of surveillance.

This sentiment underlines fears that the legislation could infringe upon the privacy of not only those receiving benefits but also their appointed representatives.

Yet somehow – just somehow – despite fraud and error rates falling and this new Bill giving the DWP overreaching powers, it is still not satisfied.

Still not satisfied

As Civil Service World reported:

Permanent secretary Sir Peter Schofield said he was “pleased to report” the overpayment rate for core benefit Universal Credit had “reduced by over a fifth compared to last year”.

However he acknowledged that the department still needed to “go further” to return to pre-pandemic levels of fraud and error…

“We have continued to improve payment accuracy and continued to learn and develop our understanding of the root causes of all types of fraud and error, taking steps to use this learning to ensure payment accuracy,” he said.

“We are making better use of data and continuing to detect and address inaccuracy where it already exists, in an effective and efficient way, to minimise the impacts of debt on our claimants.”

Of course, as Civil Service World also pointed out, Schofield got a £10,000 pay increase in the past year as well.

The DWP’s obsession comes with real-world consequences. Resources are diverted into intrusive gatekeeping: investigations, retroactive debt recovery and digital “tell‑us‑once” systems that frequently ensnare the vulnerable. Recall the Universal Credit advance scandal, a digital loophole that saw up to £221 million siphoned off through fraudulent claims—yet it was only addressed once public outrage forced action, not out of departmental foresight. 

Even as DWP scrambles to recover past benefit overpayments through a hired “Targeted Case Review” team, this is presented not as correcting past mistakes but as staggering “savings” from fraud — when in reality, it’s money the system overpaid in the first place. 

Structural hypocrisy

Contrast this with the laissez-faire approach to corporate giants, many of which sidestep billions each year. According to HMRC’s own figures, the UK’s total tax gap from such avoidance exceeds £46.8 billion annually, or over 5% of all tax revenues—a sum that dwarfs the £1–2 billion lost to alleged benefit fraud, and a percentage that is higher. 

Even using conservative estimates, the scale of corporate avoidance is orders of magnitude larger. Yet, enforcement remains weak, penalties minimal, and investigations rare. Meanwhile, MPs glare at people on benefits for errors amounting to peanuts by comparison.

This anti-fraud zeal is less about recovering money and more about policing the poorest. The DWP’s rhetoric vilifies fraud as rampant, when in reality it is a small and contained issue. Meanwhile, systemic cracks in the tax system are exploited yearly to the tune of tens of billions, with little fuss.

Such hypocrisy isn’t accidental—it’s structural, and the DWP is at the heart of it.

Featured image via the Canary