The human cost of benefits underpayments

Walking home from the supermarket I noticed one of those awful posters that point the finger of suspicion at so-called benefit fraudsters. Timely then that figures released by the DWP show that more than £1bn of total benefit expenditure was underpaid last year. Between April 2007 and March 2008, £2.6bn, or 2%, of total benefit expenditure was overpaid during the year due to fraud and error.

However over the same period – and even discounting those claimants who are entitled to benefit but who do not apply and those whose applications are incorrectly refused – those who made a claim for benefit and were made an award were underpaid £1.1 billion.

So that figure doesn’t include people who didn’t apply for a benefit but were entitled to and those incorrectly refused. I assume then the figure would be much higher if they were included in the figure. And I bet many people are put off from applying for benefits due to the bureaucracy, the form filling is a total minefield, fear that they may be refused, conditionality, the various obstacles and hoops (voice risk analysis, for example) people have to jump through to prove their entitlement to a meagre benefit.

The figure includes underpayments of income support and JSA of £130m; £120m of pension credit; £190m of housing benefit; £250m of disability living allowance; £150m of retirement pension; and £50m of incapacity benefit. In March ’08, the Local Government Association estimated that claimants are missing out on council tax benefit worth £1.8bn ‘cos the rules are complex and poorly advertised.

Even with overpayments due to error and fraud at £2.6bn, lets put that into some perspective by looking at how much is lost due to tax avoidance and evasion. It is estimated that £105bn is lost through both tax avoidance and tax evasion.

What is lost through benefit fraud is a drop in financial ocean compared to tax evasion and tax avoidance. And as so much revenue is lost through tax avoidance and evasion where are the posters pointing at these fraudsters? We know where Brown’s loyalities and priorities lie with the banking bail-out and scapegoating the poor regarding benefit fraud is so much easier than targeting the rich and powerful!

The spotlight falls on the poor in this society, the claimant who is trying to make ends meet by taking on some work whilst not disclosing it to the state and the rich and powerful who have the luxury of not having to worry about money but get away with tax avoidance and evasion cos they can.

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10 thoughts on “The human cost of benefits underpayments

  1. “the various obstacles and hoops (voice risk analysis, for example) ”
    What is voice risk analysis? Is this why initial claims will only be dealt with on the ‘phone?

  2. Managed to google it myself and yes it is. I must be a dodgy character as I was on the phone with the tossers for over an hour last time I started a new claim ha ha ha!!

  3. Voice Risk Analysis is utterly offensive.

    The Voice Risk Analysis technology picks up in the changes in the caller’s voice “which can be signs of stress when telling lies”,.. The person’s “normal” voice is measured against these changes. Benefit advisers will be trained in using “sophisticated 21st century techniques to stop criminals”. It was originally tested in north London first (Harrow Council for Housing and Council Tax benefits) before being rolled out to the rest of country including Job Centre Plus. No mention of monitoring and who will monitor.

    And Harrow council were so pleased that they ‘saved’ so much money due to VRA.

  4. The initial phone call is also utterly offensive – I was asked at least ten times, in different ways, if I lived with a partner. Obviously it is a very difficult question that must have confused me so they had to keep asking me?!?!? Tossers! I had no idea they were doing this.

  5. I think these initial phones calls are ways of putting people off, to intimidate, to increase the bureacracy, it is faceless. VRA is also run by Crapita… opps… Capita.

    The number of benefits that are underpayed and not claimed (people put off, for example, claiming benefits they are entitled to) for are on the increase while benefit fraud and error has been decreasing and has stabilised.

    These ‘reforms’ are causing more distress and anxiety, and pleasing NL as mpney is being saved. It is a joke when NL harp on about reducing poverty when these ‘reforms’ increase poverty.

  6. Of course they do. Claimants are scum! I have just found out that I have been underpaid £20pw on Housing Benefit as a new rate came in but I have to claim for it. But to do that I have to lose a week’s benefit – “that is the system” apparently. I don’t even like to think how long this new rate has been in. HB/CTB is even worse than DSS benefits.

  7. Indeed, these are the new ‘rules’ that cause more distress.
    I think the new local housing allowance has been in for a year or so.

    Housing Benefit and Council Tax benefit are some of the most complex benefits.

  8. earwicga: I don’t know if you have seen this website
    before? Kinda interesting and a useful resource.

    Shame our greedy grasping MPs didn’t think about the public money they were seriously wasting with their fridge magnets, baubles, porn, silk cushions, moats, duck thingy… and more…

    These benefit scrounging MPs….

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