Thousands of Universal Credit claimants fail to declare earnings in £5.6bn fraud

Thousands of people are failing to declare their earnings while claiming benefits, Government statistics show. The Department for Work and Pensions uncovered £5.66 billion of fraud within Universal Credit in the 2023/2024 financial year, a rise on the £4.93 billion the year before.

The huge figure means thousands of claimants are not disclosing some or all of what they are earning from a job. The amount of Universal Credit paid out reduces by 55p for every £1 in wages.

But the DWP says the amount of fraud as a proportion of Universal Credit expenditure has actually fallen from 11.4 per cent to 10.9 per cent. This is because there are now more people claiming the benefit due to transferring from older legacy benefits or making new claims during the cost of living crisis.

READ MORE:

• DWP making huge Universal Credit change four years earlier as 800,000 affected

• How much you can get in Universal Credit - full list of DWP payments per claim

Universal Credit overpayments as a whole, including fraud, claimant error and DWP error, totalled £6.46 billion, a rise of almost one billion on the figure of £5.5 billion for 2022/2023. Again, the DWP says the percentage of Universal Credit spending that has been overpaid has actually dropped slightly because of the climb in people claiming the benefit.

There was also £180 million in Universal Credit underpayments, mostly down to DWP mistakes in not working out people's housing costs correctly.

The biggest cause of fraud among Universal Credit claimants was "under-declaration of income from work undertaken", the figures indicate. There has been a big drop in the amount of fraud by people who aren't admitting they are living together, which would trigger a joint claim with the other person's finances also taken into account.

Another big source of fraud in the system was not disclosing financial assets, the DWP said. This comes as tests of bank account monitoring found that at just one high street bank, 60,000 people receiving Universal Credit, ESA or Pension Credit were found with an average of £50,000 in savings, well over the eligibility threshold.

For those on Universal Credit and ESA, the cut-off is £16,000 in savings, while Pension Credit claimants are no longer entitled if they have more than £10,000 saved up. Additionally, investigations revealed 3,000 accounts with overseas transactions for more than four consecutive weeks, suggesting claimants might be living abroad or out of the country for longer than allowed.

The DWP this week set out the latest version of its fraud plan. It says it aims to save £9 billion by 2028 in a "sustained crackdown on benefits cheats." The plan includes recruiting 2,500 new staff to scrutinise millions of Universal Credit claims, updating its powers for gathering information, introducing a new civil penalty to deter fraudsters, and investing £70 million in sophisticated data analytics.

Get breaking news on BirminghamLive WhatsApp. Join our dedicated community to get the latest updates. You can find out more in our Money Saving Newsletter which is sent out daily with all the updates you need to know on pensions, benefits, finances, bills, and shopping discounts.