This week the Department of Work and Pensions have published statistics revealing that as of February 2012 there were just over 5 million people claiming housing benefit; a dramatic increase of 28,290 on the figures for January.
The numbers of social renters claiming housing benefit increased by 13,410 to 3.37 million, while there are now 1.63 million private renters claiming housing benefit, up by 14,880.
The new fraud and error figures report for 2011/2012 also shows that out of a total benefit expenditure of £159 billion, £3.2 billion was lost to fraud and error (over payment of benefits) :
- £1.1 billion has been lost to fraud
- £1.3 billion has been lost to customer error (the highest it’s ever been)
- £0.8 billion has been lost to official error.
Welfare Reform Minister Lord Freud said:
“The current benefit system is far too complicated, which leaves it open to fraud and error. Universal Credit will revolutionise the way we pay people benefits by simplifying and automating the system to ensure taxpayers’ money is going to those who need it the most.
“Universal Credit will dramatically reduce the chances of fraud entering the system and will cut down on error as it will be much easier to understand and administer. It will also reduce the incentive for fraud by making sure people are better off in work than on benefits.”
Universal Credit will mark a significant change from the current system in which many social housing tenants choose to have their housing benefit paid directly to their landlord.
The intention is that this payment – which will include an element for housing costs – will be paid as an integrated payment to the tenant.
We at LandlordReferencing are also highly critical of the universal credit bill, as we believe tenants should have the right to decide if their rents are paid directly to their landlord – to help tenants on low incomes avoid debt and arrears.
Principally, this is deeply worrying for residential landlords across the UK, because if this bill is passed un-amended not only will it drive up rent arrears, evictions and homelessness, it also threatens the delivery of affordable housing in high-value areas; which we are already beginning to see happen…
- Social Referencing Imperative as ‘Social-Cleansing’ continues.
- Winter Migration; Tenants Fly North.
- New Government Policy will Breed Rogue Landlords.
- LRS Tenant Alert Running Total 2012.
Ahead of Universal Credit, the DWP has stepped up its efforts to target fraudsters with the intention that it will reduce annual welfare fraud and error overpayments by one quarter, by March 2015. The range of measures include a regional task force, using credit reference agencies, a new IT system (which will automatically inform local authorities of new claims or changes in benefits and tax credits) and joint investigations via HMRC and local authorities.
The Welfare Reform Act 2012 also has tougher penalties to deter fraudsters, which includes low level benefit fraudsters now facing a fine of up to £2,000 without being taken to court. Cautions will no longer be an option, which in theory means no fraudster will escape without punishment.
Other penalties coming into effect in the future to cut down on fraud and error include:
- Extended loss of benefit for offences, which result in a conviction, of 13 weeks for a first offence, then 26 weeks for a second offence and three years for a third offence.
- An immediate three year loss of benefit for serious or organised benefit fraud or identity fraud.
- A new £50 civil penalty in cases where claimants negligently give incorrect information on their claim or fail to report a change in circumstances which results in an overpayment.