HOUSING BENEFIT FRAUD
This web site is dedicated to her majesty’s government, who have managed to encourage housing benefit fraud whilst appearing to oppose it- no mean achievement.
How have they done this?
- By allowing encouraging rents to rise, forcing more people to claim housing benefit and making more landlords benefit dependent. This obviously increases the scope for fraud.
- By "discovering" fraud where none exists. For example, the government announced estimates that up to 12% of claims for Disability Living Allowance involved fraud. However the House of Commons social security committee found that fraudulent claims for this benefit were "minimal".
- By setting up perverse subsidy incentives. Until recently councils got more in subsidy from the Department of Social Security if they discovered fraud that had already taken place. It is still the case that there are huge subsidy incentives for councils to identify fraud where none exists. Indeed, councils often fraudulently claim fraud subsidies.
- By making the system more complex in order to save money. According to the report by the National Audit Office, "Measures to Combat Housing Benefit Fraud" 70% of fraud appears to be opportunistic, involving failure to report changes of circumstances which would reduce the amount of housing benefit, for example a change in income. Housing workers with experience of the problems faced by casual workers and people with fluctuating earnings will understand how these problems can arise. Few housing benefit offices can cope with this and reporting changes simply often results in benefit being stopped for ages until things are sorted out. This could be eliminated at a stroke if claimants in work had their benefit fixed for a six month period, whilst retaining the right to request a review of their benefit at any time- a recommendation made by the National Association of Citizens Advice Bureaux in their report "Falling Short- the case for housing benefit reform. This principle is already employed, to a limited extent, in the working families tax credit. The housing benefit rules described in this guide contain many other examples of the way that housing benefit rules are made complex simply in order to save money.
- By making it difficult to report changes in circumstances which may affect benefit. When housing benefit started a claimant could fulfil their duty to report changes by telling the Department of Social Security. The Department was always forgetting to tell councils so the government introduced the rule that claimants had to tell both. Despite new rules and technology that enable councils and the Benefits Agency to exchange information freely and quickly, this is still the case.
- By introducing rules that are not only complex, but so unfair as to encourage fraud. For example, deductions made for "non dependants", have increased over the years by percentages which far outstrip inflation.
- By retaining rules that allow councils to recover fraudulent overpayments from wholly innocent parties, such as when a claimant commits fraud and the overpayment is recovered from the landlord.
What does the government get out of appearing to discourage fraud whilst actually encouraging it?
- It is seen to be "tough on scroungers", which is always a vote winner.
- It can create a climate where there is a stigma attached to claiming benefits, which means that there is less of a fuss when benefits are cut. They have even managed to hide the fact that fraud is far more common in the administration of means tested benefits, so national insurance benefits are stigmatised as well.
- It can save money discouraging legitimate claims. For example, many of the first victims of the operation of the Verification Framework, which is supposed to prevent fraud, were elderly and infirm claimants who discontinued their claims rather than put themselves through the complex red tape now involved in claiming.