Fraud and error overpayments in the advantages system reached file ranges final 12 months, fuelled by bogus Common Credit score claims.
The Division for Work and Pensions (DWP) estimates it overpaid £5.5bn of Common Credit score in 2020-21, with checks relaxed to make sure a file variety of new claims could possibly be processed and paid.
The division mentioned the COVID-19 pandemic and subsequent leisure of those checks have been the principle drivers of the rise in overpayments, with the DWP estimating these elements accounted for £3.8bn in overpayments.
The variety of individuals claiming Common Credit score doubled amid the pandemic, rising from three million to 6 million.
In line with the Nationwide Audit Workplace (NAO), many new claimants had extra complicated claims, similar to self-employed earnings, that are extra weak to fraud.
A number of organised legal assaults have been additionally seen in the course of the pandemic, with fraudsters concentrating on Common Credit score specifically and submitting claims in different individuals’s names.
General, the DWP estimates it overpaid £8.3bn (7.5%) out of £114bn of advantages excluding the state pension in 2020/21.
This is a rise of £3.8bn since 2019/20.
In line with the NAO, Whitehall’s spending watchdog, that is the best charge since data started in 2005.
“I’m involved that the extent of fraud and error in the advantages system continues to extend 12 months on 12 months, now reaching its highest degree since data started,” Gareth Davies, the top of the NAO, mentioned.
“This has an actual impression on public funds and on those that face deductions to their earnings resulting from overpayments.
“I recognise that the pandemic and the ensuing surge within the variety of claimants has elevated DWP’s publicity to fraud and error.
“It should now assessment all instances that might have been topic to fraud throughout this time, while persevering with to progress our previous suggestions on the best way to cut back fraud and error.”
A DWP spokesperson mentioned: “Following an unprecedented 12 months through which the variety of Common Credit score claimants doubled on account of the pandemic, fraud and error in the advantages system stays low with 95% of advantages price greater than £200bn paid accurately.
“Our precedence when the outbreak hit was to verify cash reached claimants – these most in want at a difficult time – as quickly as potential and we at the moment are reviewing suspicious instances.
“These discovered to have claimed advantages to which they don’t seem to be entitled face legal investigation.”
As well as, the DWP is owed £5bn of overpayments, which is placing further pressure on its assets and doubtlessly creating uncertainty and hardship for claimants.
It has additionally emerged that ongoing failings imply an estimated 132,000 pensioners are getting much less state pension than they’re entitled to.
A pot of £1bn has been put aside to reimburse people who’ve been underpaid over the previous 30 years.
The division is working to assessment all of the instances and pay pensioners their appropriate quantities by the tip of 2023.
The NAO mentioned the estimated degree of fraud and error within the state pension yearly stays decrease than for different advantages.
The DWP estimates it would want a minimum of an additional 3,000 further workers to take care of its workload because it emerges from the pandemic, with the extent of overpayments, excluding the state pension, to remain larger than regular for some time.
In line with the NAO, the DWP ought to establish and assessment all fraud instances attributable to stress-free controls after which interact in fast and clear communication with claimants about any cash they owe on account of overpayments.
The watchdog additionally mentioned the division ought to perform a classes discovered train into its method in the course of the pandemic.