The system for people convicted of benefit
fraud has been changed yet again, writes Gary Vaux
A lot of media attention was given to Tony
Blair’s idea that parents could lose child benefit if their
children misbehaved. While that furore was going on, however, the
benefit system for people convicted of benefit fraud was quietly
changed yet again without so much as a letter to The Guardian.
example, the Social Security Fraud Act 2001 provides:
greater powers for social security staff to demand information from
public and private sector organisations about individuals who are
suspected of benefit fraud (for instance, banks, insurance, utility
and telecoms companies, and even educational
Powers to withdraw or reduce benefit for people convicted twice for
two separate benefit offences within three years (see
powers to prosecute people who deliberately conceal changes that
affect benefit entitlement.
additional powers to get information can be used when there are
reasonable grounds for believing that a claimant “has committed, is
committing or intends to commit a benefit offence”.
Employers colluding with benefit
offences face prosecution too, but the act says that the employer
can pay a penalty as an alternative to prosecution. This can vary
between £1,000 and £5,000, depending on the number of
employees involved and how far the employer has colluded with the
fraud. For example, giving casual workers time off to sign on and a
lift to the Job Centre is a safe indicator of collusion!
addition to the fraud act, the Social Security (Loss of Benefit)
Regulations 2001 came into force on 1 April 2002. These deal
specifically with the new “two strikes” rule.
benefits (which are referred to as “sanctionable”, that is they can
be reduced or stopped), such as incapacity benefit or contributory
jobseeker’s allowance, will not be paid for a set period of 13
weeks. Reduced rates of income support, income-based job-seeker’s
allowance, housing and council tax benefits may be paid instead.
The income support payments are designed to cover hardship cases
only and will be paid at a lower level than ordinary income
Housing benefit won’t be
sanctioned even if the person is reduced to a “nil income” because
their other benefits have been stopped. However, if the only
benefit they were getting is housing benefit (because they are
working, for example), then this too will be paid at a reduced rate
for 13 weeks.
offence must have been committed in relation to a “disqualifying
benefit”, which includes attendance allowance, disability living
allowance and child benefit. However, those particular benefits are
example would be: Joe commits two benefit offences within three
years. One is in relation to child benefit, the other to
jobseeker’s allowance. He now receives incapacity benefit, which is
sanctionable, and disability living allowance and child benefit,
which are not. Twenty-eight days after the second conviction, he
loses incapacity benefit for 13 weeks.
only grounds for appeal against reduction or non-payment of
sanctionable benefits is that “any of the convictions was
erroneous”. Benefits will be paid in full if the conviction is
quashed. These punishments are in addition to anything the court
has imposed (fines, community service, imprisonment and so on).
They are not an alternative.
Gary Vaux is head of money
advice, Hertfordshire Council. He is unable to answer queries in
person, either by post or by telephone. If you have a question to
be answered in Welfare Rights, please write to him c/o