Rampant benefit fraud is officially a right-wing fairy tale

A letter from HMRC and a DWP logo
Steve Topple

Benefit fraud against HMRC and the Department for Work and Pensions (DWP) is rife, if you believe right-wing newspapers and Channel 5 documentaries. But as the latest statistics show, it’s little more than a load of cobblers.

HMRC and DWP fraud: rampant?

HMRC has released [pdf] its estimates of benefit fraud and error for child and working tax credits for 2016/17. And the figures on benefit fraud and error are somewhat small.

HMRC said [pdf, p4] the total “level of error and fraud favouring the claimant” was £1.32bn; just 4.9% of the total tax credits bill:

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Tax credits fraud graph

In detail, it found that [pdf, p7]:

  • Error favouring the claimant was £1.05bn; 3.9% of the total tax credits bill.
  • Fraud favouring the claimant was £280m; 1% of the total tax credits bill.

These were HMRC’s “central” estimates. It produced [pdf, p7] higher and lower ones, to allow for error:

tax credit error and fraud percentages

Tax credits error and fraud numbers

What’s more, HMRC noted [pdf, p22] that the figure has decreased over time:

Tax credit fraud and error over the years

Who are the real scroungers?

But what of DWP benefit fraud? The kind the Daily Express would have you think was rampant?

A selection of Daily Express Headlines

Like HMRC, the DWP also estimates fraud and error for its benefit payments. Its most recent estimate shows [pdf, p3] that overpayments to claimants in 2017/18 were £3.8bn, or 2.1% of its total bill. Of this, 1.2% (£2.1bn) of its £177.5bn budget was claimant fraud.

Meanwhile, HMRC estimated the amount of tax avoided, evaded, or unpaid by people and companies in 2015/16 was £34bn – more than the whole tax credits bill.

So – who are the real benefit scroungers? Possibly not the people the right-wing media would have you believe.

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Featured image via Images_Of_Money – Wikimedia and UK government – Wikimedia 

Additional image via Black Triangle 

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