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Public Accounts Committee
Report published 28 October 2015. Government response published 21 January 2016.
Benefits and tax credits support about 20 million households across the UK. The level of fraud and error has been a persistent concern for the Committee. In 2013-14, the Department for Work and Pensions and HM Revenue and Customs overpaid benefits and tax credit claimants by £4.6 billion because of fraud and error, and underpaid claimants by £1.6 billion.
Overpayments increase costs to taxpayers and reduce public resources available for other purposes. Underpayments mean households are not getting the support they are entitled to.
In October 2010 the departments published a joint strategy to tackle fraud and error in benefits and tax credits, which planned to reduce annual overpayments by one-quarter by March 2015, or around £1.4 billion. Based on current estimates, HMRC will meet its spending review target for fraud and error, while DWP is not on track. The departments have implemented some major changes that should help to reduce fraud and error in the future. For example, DWP is introducing Universal Credit and other changes to the welfare system. HMRC has changed tax credits rules and started a project with the private sector to increase the Department’s capacity.
This inquiry examines how these opportunities make it easier to reduce some types of fraud and error, the remaining risks, and how both departments manage fraud and error during the long and complicated transition to Universal Credit.
Evidence given by Robert Devereux, Permanent Secretary, Jon Fundrey, Senior Responsible Officer, Fraud, Error and Debt programme, Department for Work and Pensions, Lin Homer, Chief Executive and Permanent Secretary, and Nick Lodge, Director General Benefits and Credits, HM Revenue and Customs.
Public Accounts Committee publishes its report on fraud and error in benefits and tax credit payments
National Audit Office Report: Fraud and error stocktake