21 October 2019
Universal Credit – fraudulent claims and advances
Over recent months there have been cases whereby tax credit claimants, and others, have unwittingly been targeted by unscrupulous groups into having their personal information used to submit a universal credit claim, with the aim of securing a UC advance payment (and sometimes also the UC award) which is then siphoned off, either in part or in whole, to the fraudsters – basically a scam. Of course, the UC claim has the effect of terminating any legacy benefits/tax credits the victim was claiming.
The matter has been discussed in Parliament and was more recently discussed with the Work and Pensions Committee, where the Permanent Secretary confirmed examples of this type of fraud were still coming forward and there were approximately 85,000 known cases by October 2019.
HMRC have confirmed to us that where a tax credit claimant notifies HMRC, DWP or the Department for Communities (DfC) in N.I. that their personal information has been fraudulently used to claim UC with the aim of securing an advance payment, they are initially asked to report the matter to the police. Dedicated teams in HMRC, DWP & DfC then work closely together to investigate the circumstances around the claim, ensuring there is alignment and consistency of claimant treatment across the various Departments. If the UC claim is found to be fraudulent and the customer was in no way complicit with the ‘scammer’, HMRC will take action to reinstate the tax credits claim and has processes in place to undertake that action.
DWP have said that where a claimant is an innocent victim and has not contributed or benefited in any way from the advance payment, there is no expectation that they would repay it. Where the claimant has received some or all of an advance payment obtained in these circumstances, they will be expected to repay the part of the advance that they received. The Permanent Secretary said ‘In the event of someone whose details, for example, have been stolen and someone has made a claim on their behalf that they have had no involvement in whatsoever—they have just realised that it has happened—or if there is a situation where someone would lose the severe disability premium, in those cases we would work with them, looking at whether moving them back to legacy is the right thing to do. Some people are better off staying on universal credit, but where they are better off moving to legacy, that is what we would do.’
DWP have also confirmed they are in the process of revising some of their procedures to try and prevent this type of fraud.
The Work and Pensions Committee oral evidence session (16 October 2019) is available on the Parliament.UK website.