Updated 27 March 2013

Changes to Fraud Loss of Benefit Penalties from 1 April 2013

The Department for Work and Pensions and HM Revenue and Customs have made changes to current legislation to impose tougher penalties on people who commit benefit fraud.

These changes will ensure that we are tougher on those who commit benefit fraud and that persistent offending will not be tolerated.

Presently, certain benefits can be reduced or removed entirely if a claimant, their partner or family member is convicted of a benefit fraud offence or accepts an administrative penalty in respect of such an offence. From April 2013, the Fraud Loss of Benefit Penalty regime is being strengthened further to make the penalties tougher for those convictions where the offence has been wholly committed on or after 1 April 2013.

The current Fraud penalties system

For benefit fraud wholly committed on or after 1 April 2002, the rules allowed for the removal or reduction of benefit for 13 weeks if a claimant, their partner or a family member had been convicted of a second benefit fraud offence.

From 1 April 2010, these rules were strengthened to enable a reduction or removal of benefit for 4 weeks when a claimant, their partner or a family member had been convicted, or had accepted a caution or an Administrative Penalty, for a first (or non-linking) benefit fraud offence for benefit fraud committed wholly on or after 1 April 2010.

What is changing?

The Fraud Loss of Benefit Penalty regime is being strengthened further to make the penalties tougher for those convictions where the benefit fraud offence has been committed wholly on or after 1 April 2013.

The changes are as follows:

• The duration of the Loss of Benefit penalty will increase from 4 to 13 weeks following a first conviction in respect of a benefit fraud offence.
• The duration of the Loss of Benefit penalty will be 26 weeks where two benefit fraud offences have been committed within a set time period, with the second resulting in a conviction.
• The duration of the Loss of Benefit penalty will be 3 years where three benefit fraud offences have been committed within a set time period, with the third resulting in a conviction.
• An immediate 3 year Loss of Benefit penalty will be imposed where the benefit fraud offence involves serious organised and identity fraud.

The duration of the Loss of Benefit penalty will continue to be 4 weeks following the imposition of a DWP Administrative Penalty or caution for a benefit fraud offence.

The linking period for these new penalties to apply has been set at 5 years.

Penalties in respect of benefit fraud offences that begin before 1 April 2013 will be imposed in accordance with the relevant rules introduced respectively in 2002 and 2010 as detailed above.

Which benefits can be reduced or stopped?

The following benefits can be reduced or stopped if benefit fraud is committed:

• Carer’s Allowance
• Employment and Support Allowance
• Incapacity Benefit
• Income Support
• Industrial Death Benefit
• Industrial Injuries Disablement Benefit
• Industrial Injuries Reduced Earnings Allowance
• Industrial Injuries Retirement Allowance
• Industrial Injuries Unemployability Supplement
• Jobseeker’s Allowance
• Severe Disablement Allowance
• Housing Benefit
• Pension Credit
• Universal Credit
• War Disablement Pension
• War Widow’s Pension
• War Pension Unemployability Supplement
• War Pension Allowance for Lower Standard of Occupation
• Widowed Mother’s/Parent’s Allowance
• Widow’s Pension/Bereavement Allowance
• Working Tax Credit

The above benefits can also be reduced or stopped if benefit fraud is, or has been, committed on any of the following benefits:

• Attendance Allowance
• Bereavement Payment
• Child Benefit
• Child Tax Credit
• Christmas Bonus
• Constant Attendance Allowance
• Council Tax Benefit
• Disability Living Allowance
• Graduated Retirement Benefit
• Guardian’s Allowance
• Industrial Injuries Constant Attendance Allowance (where a Disablement Pension is payable)
• Industrial Injuries Exceptionally Severe Disablement Allowance (where a Disablement Pension is payable)
• Personal Independence Payment
• State Pension
• Social Fund Payments
• War Pension Constant Attendance Allowance
• War Pension Exceptionally Severe Disablement Allowance
• War Pension Mobility Supplement

The following benefits can’t be stopped or reduced if benefit fraud is committed:

• Diffuse Mesothelioma Scheme (2008)
• Health in Pregnancy Grant
• Maternity Allowance
• Pneumoconiosis (Workers’ Compensation) 1979
• Statutory Adoption Pay
• Statutory Maternity Pay
• Statutory Paternity Pay
• Statutory Sick Pay