Benefit Fraud Crackdown: Salvage or Scapegoating?

Austerity is a hot topic in politics these days. It is a collection of policies that have had a devastating effect on the poor and working classes of Britain. All the evidence seems to suggest that if the aim of austerity is to save the economy, then it has failed miserably. Since coming to power, the coalition government has created the largest increase in national debt of any UK government during the past 70 years.

Amidst the suffering brought on by high levels of unemployment coupled with the longest sustained period of falling wages ever known in this country, those in power seem fixated on the idea that the surest way to salvage their reputation, if not the economy, is to crack down on benefit fraud. The crackdown means more benefit fraud cases are being investigated and prosecuted than ever before.

They have been working very hard to ensure the public will view benefit fraud as the greatest scandal of our time. In truth, benefit fraud is a serious issue, but it certainly isn’t the out-of-control problem that the government – in league with certain sectors of media – makes it out to be. There are many other far more serious ways that tax revenue is being wasted, and when viewed comparatively in the light of reason, benefit fraud is just a single drop in a very large ocean.

The cost to society: Benefit Fraud v Tax Evasion

One of the more fascinating aspects of the whole benefit fraud scandal – exposing the scandal itself as a kind of fraud being played out on an unsuspecting public – is that the DWP estimates the amount lost due to benefit fraud during the last financial year was £1.2bn. That is certainly a big number, but still less than the estimated £1.5bn the government saves by not paying benefits to people who should be receiving them, but for one reason or another are not.

In fact, as Katharine Sacks-Jones reported in The Guardian, the government and the media have done such a convincing job of vilifying people dependent on benefits to survive that it has become a profound social problem. The report stated that many people who are eligible to claim benefits but try to avoid it do so because of the stigma.

Yet, even if we overlook the technicality of the government saving more from not paying people who it should be paying than it loses from paying people who it shouldn’t be paying, the amount claimed as lost through benefit fraud seems a trifling matter in comparison to the estimated £34bn lost through tax evasion by more wealthy individuals and corporations.

Clearly if resources were devoted to chasing tax evaders (a small number of people defrauding a lot of money) rather than benefit cheats (a large number of people defrauding a small amount of money) the government’s task would be a simpler one and the positive return to the nation would be greater.

An Unfair and Relentless System

The problem for those caught up in the benefit fraud crackdown is that when it comes to these types of investigations, the government behaves like a machine. You cannot expect empathy, pity, or remorse from the government. Your individual circumstances are nothing more than data, and if that data can be used against you, it will be.

But individual circumstances do matter. Not everyone who receives an overpayment has necessarily done so with the intent of defrauding the government, but they will often be treated that way regardless. For example, somebody may not know how to notify the authorities of a change in their circumstances, or another person may even physically prevent them from doing so.

People with disabilities are particularly vulnerable because the systems that have been put in place are not designed to fully accommodate their needs. But thousands of others can also find themselves innocent victims of the system as well, for all kinds of reasons. As a result, they can be subjected to quite harsh reprisals by a system that does not discriminate between the innocent and the guilty.

This is in no way fair. The burden of proof should always be on the state, but in practice most people accused of benefit fraud are made to feel they must prove their innocence, and the tactics employed by compliance officers can be ethically questionable. For some, matters like innocence or guilt are insignificant, as their focus is solely on chalking up another statistic.

Protecting your Rights

Investigators should always maintain professional integrity and should treat the people they interview with appropriate respect. Unfortunately, some investigators can get carried away with the role they play, apparently imagining themselves to be in some kind of TV detective show where there are no rules. In the real world, there are rules, but if you don’t know them, it is easy for investigators to exploit their authority and use it against you.

Benefit fraud is not a small allegation. In fact, it is a very serious accusation. You may be aware that the official caution includes the words “anything you say may be used as evidence against you”. It is important to acknowledge the missing words as well, namely: nothing you say will be considered as evidence for you. You have nothing to gain by assisting the people working against you.

If you have received an overpayment or received money to which you were not entitled, you do have an obligation to repay the money. But it is a very big jump from the simple matter of stating you have acquired a debt to proving that your overpayment was a result of fraud. Neither should it be assumed that the authorities are always correct in their assessment that an individual received an overpayment.

Legal Consultation is Essential in Benefit Fraud Cases

Without legal representation, everyone is against you. Making a lone stand against an army of machines is a mug’s game. What you need is somebody who understands the “machines” and the rules they follow. This knowledge can expose weaknesses in your opponent and give you a fighting chance.

Hylton-Potts has seen an increase in the number of people receiving benefit fraud letters from HMRC, so it is a matter that all benefit recipients should be aware of and be ready with a plan of action in case such a letter appears in their mailbox. The first step in your plan of action should be to contact us for advice.