Skip to main content

Unemployment Benefit Fraud

Volume 264: debated on Tuesday 24 October 1995

The text on this page has been created from Hansard archive content, it may contain typographical errors.

To ask the Secretary of State for Education and Employment what was the total amount saved by unemployment benefit fraud investigators in the last financial year; what evidence is required for each individual signing off unemployment benefit to be counted in the total figure for unemployed fraud figures; what is the assumed number of weeks that a unemployed fraudulent claim would have on average continued if not investigated; what research is the basis for the assumed number of weeks that an unemployed fraudulent claim would have on average continued if not investigated and what consideration has been given to the continued accuracy of this research; and what safeguards exist against Department of Social Security inspectors exaggerating the benefit savings for investigations into fraudulent benefit claims in an attempt to meet Department targets. [37592]

Responsibility for the subject of the question has been delegated to the Employment Service Agency under its chief executive. I have asked him to arrange for a reply to be given.

Letter from M. E. G. Fogden to Ms Liz Lynne, dated 24 October 1995:

The Secretary of State has asked me to reply to your question about benefit fraud investigation.

In 1994/95 78,231 clients withdrew their claim to benefit after being investigated by Employment Service (ES) Inspectors. This resulted in gross benefit savings of £92,061,095. After deducting the cost of the benefit fraud organisation, the net savings were £64,556,652.

Safeguard exist through the checking and validation process performed by fraud staff, their managers and Audit. ES Inspectors authorise each saving/sign off, provided there is a link between the saving/sign-off and the last recorded action of the investigation and the claim is closed or modified within 10 working days of that action.

Inspector Manager, who manage 10–15 ES Inspectors, check a minimum of 10% of all cases where a saving/sign-off is claimed to ensure that they are valid. All client prosecutions are authorised by Senior Inspector Managers who also arrange for an annual audit of savings/sign-off cases, where a proportion of cases are checked for validity. The cases checked include some which have not previously been validated.
Benefit savings are calculated by multiplying the weekly amount of benefit in payment, at the time the client signs-off/modifies their claim, by 22. This 22 week figure was identified by Department of Social Security research in 1982 and represents the number of weeks clients would have remained on the register if they had not been investigated by ES Inspectors.
Since 1982 there have been several similar studies undertaken by Benefits Agency and the ES, the last such study was in 1994. This is an ongoing process and has confirmed that the 22 week multiplier is still valid.
I hope this is helpful.