What can Britain learn about tackling Benefit Fraud from Iceland?


Our blogs about benefit or tax credit fraud are usually on recent legislative developments, such as our recent post on the Snooper’s Charter, or advice for those who have just received a letter stating that they’re being investigated. However, our experts here are constantly looking for new legal trends abroad, as well as the UK.

Whether it’s a new government report or a high-profile court case, such foreign legal examples can often have an impact at home too, and we at Hylton-Potts like to stay ahead of the game when it comes to the potential impact of such developments on our clients.

We know that our own government has been making extensive changes to try and crack down heavily on the number of people committing benefit fraud. With this in mind, it’s worth considering how other countries tackle the issue, and what Britain could learn from their campaigns. Iceland is an excellent example, as they’ve recently released a report which details just how successful their campaign has been since its launch in 2014.

What’s the report?

According to reports by the Icelandic media, the National Audit Office issued a press release in 2013, warning that disability fraud in Iceland could amount to as much as 3.4 billion ISK annually (around £24.4 million). This was based on figures from a Danish report which had estimated that 3-5% of all benefits claims were fraudulent.

This report was highly controversial, but its findings led the Icelandic government to consider its approach to benefit fraud. Fierce political debate eventually resulted in the Social Security Administration receiving extensive powers to investigate those under suspicion of fraud, and monitor them more closely, from 2014.

Fast forward four years, and the results are in on whether these were the right moves to make. The National Audit Office released the new figures at the end of March this year, which show that only a handful of new cases of fraud have been identified since the measures were taken.

Throughout the period this campaign has been running, it’s come up against much criticism, particularly regarding the invasion of privacy that the powers represented and the stigma surrounding those receiving benefits that it produced. However, the results showed that less than 1% of all benefit cases checked involved fraud, and most flagged cases were due to simple human error.

What makes Iceland different?

It’s difficult to know what Iceland is getting right above all other countries when it comes to tax and benefit fraud. However, the main factor seems to be the attitude the population has towards crime. According to most reports by the media, violent crime is virtually non-existent. People are far more relaxed about their safety, with no need to lock their doors and even reports of parents leaving their babies outside unattended.

This would certainly never happen in the UK. According to the 2011 Global Study on Homicide by the United Nations Office on Drugs and Crime (UNODC), while the homicide count in 2009 was just 1 in Iceland, it was 724 in the UK, 15,241 in the US and 43,909 in Brazil.

Crime, it seems, from murder through to fraud, is far rarer in Iceland than in the UK. One major social factor that experts claim is the reason for this is that there’s virtually no difference among upper, middle and lower classes in Iceland. This sense of equality amongst citizens of Iceland means that there’s no tension between economic classes, and therefore no frustrations or rebellions in the working environment, and no need to exert that anger in other areas of life, such as petty crime or worse.

Another good example is gun control; while this remains a topic of heated debate within the US, any crimes that do occur in Iceland rarely involve firearms, although there are approximately 90,000 guns in a country with just over 300,000 people. In order to acquire a gun however, regulations are much stricter, with a medical examination and a written test required – even police are unarmed, although they’re rarely called.

What’s happening in the UK?

Clearly, there’s a vast difference in the cultural and socio-economic structure of Iceland compared to other developed countries, but we must ask ourselves what the UK can learn from their success at lowering benefit fraud.

As we stated at the beginning of this article, we recently reported on the Snooper’s Charter and what it could mean for those claiming benefits throughout the UK. However, it’s worth mentioning this again as there are many parallels with Iceland.

These were measures put in place out of frustration and, to an extent, desperation on the part of local authorities who are constantly under pressure by the British government to reduce the amount of money wasted each year on benefit fraud. Just like Iceland, we are trying to prevent our situation from getting any worse, and similarly, these new powers have been met with controversy.

Looking at our own most recent statistics, it’s easy to see why the government is trying to crack down on benefit cheats. According to these, the total amount of benefit expenditure has actually increased over the 2015-16 period to £172.3 billion, up from £168.1 billion in 2014/15, despite all efforts to combat it. In particular, housing benefit overpayments have increased the most, with a 6% rise – or £1.46 billion.

Plus, there are more and more stories coming out of the woodwork about serial benefit cheats who have conned the government out of thousands. One of the most recent cases was Alan Barlow – a pensioner who claimed almost £100,000 in benefits on the premise that he was struggling to survive in the UK, yet all the while he was living in Thailand with his new wife and two children.

The 67-year-old kept his council house in Stoke-on-Trent, staying there whenever he jetted back across to the UK for treatment on the NHS. Barlow has just begun his 16-month prison sentence after pleading guilty to four counts of benefit fraud.

It’s easy to see why such drastic measures are being taken by politicians, but it’s important to remember that they are only a small section of the population. Given the success in Iceland of the more invasive powers given to authorities to lower benefit fraud though, could the UK learn from this approach? Could the Snooper’s Charter really help to improve life for all concerned?

We certainly hope that more of these individuals who abuse the system are brought to justice, but we are eager to help our clients who are often the victim of human error or simply making a mistake on their forms.

At Hylton-Potts, we’re fully aware of your rights, and we can explain your positon if you’re being investigated for benefit fraud. The first thing you must do though, is to get in touch with us so we can assess your situation. Luckily, we’re available round the clock, and you can call us on 020 7381 8111, or email us at law@hylton-potts.com.

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