Benefit fraud generally means deliberately claiming or continuing to receive benefits you are not entitled to. It can involve giving false information, withholding relevant information or failing to report a change in circumstances that affects your entitlement.

An incorrect claim or overpayment does not automatically mean a criminal offence has been committed. Mistakes happen, information can be misunderstood and a claimant may not realise that a particular change must be reported. In the most serious circumstances, where you are accused of benefit fraud in a criminal case, the prosecution must prove the legal elements of the offence alleged, including the required knowledge or dishonesty.

In this article, our benefit fraud solicitors explain what can amount to benefit fraud, the difference between an honest mistake and deliberate wrongdoing, how cases involving the Department for Work and Pensions (DWP) or local authority investigations begin, what evidence investigators may rely on and what can happen if a case progresses towards prosecution.

What is classed as benefit fraud?

A benefit fraud investigation may arise where it is alleged that a claimant deliberately:

• Failed to declare earnings from employment or self-employment
• Did not disclose savings or capital that could affect entitlement to benefits
• Failed to report that a partner had moved into the household
• Continued claiming Housing Benefit or another benefit after a relevant change of address or circumstances
• Gave false information about income, housing or personal circumstances
• Used a false identity or false documents to support a claim

The existence of one of these circumstances does not by itself prove fraud. Bank records might show income that was not included on a claim, for example, but investigators still need to establish what the money represented, whether it affected entitlement, what the claimant knew and why it was not reported. As such, it is often possible to mount a defence in these cases.

The same principle applies to benefits such as Universal Credit, Housing Benefit and Employment and Support Allowance. A change in income, savings, work or household circumstances may affect entitlement, but the fact that a claim later proves to be incorrect is different from proving that the claimant deliberately acted fraudulently.

When does a benefit mistake become a criminal offence?

A mistake becomes a criminal matter when the evidence supports the legal requirements of a specific offence. The important distinction is usually between an error or misunderstanding and conduct that was knowingly or dishonestly carried out to obtain or retain benefits to which you were not entitled.

A claimant may have misunderstood a reporting requirement, believed information had already been supplied to another government department or failed to appreciate that a change in their personal circumstances affected the amount they could claim. Those facts need to be examined before an assumption is made that benefit fraud has taken place.

Benefit fraud prosecutions may be brought under the Social Security Administration Act 1992 or, depending on the allegation, the Fraud Act 2006. Section 111A of the 1992 Act includes offences involving dishonest false statements or information used with a view to obtaining benefit, as well as dishonest failures to notify certain changes. The Fraud Act can apply where a person is alleged to have acted dishonestly by false representation or by failing to disclose information they were under a legal duty to disclose.

Where these allegations are made, our defence solicitors will challenge whether the prosecution can prove the required knowledge, intention or dishonesty.

How does a benefit fraud investigation start?

A benefit fraud investigation can begin after the DWP identifies a discrepancy in a claim, receives information from another public body or is given a report alleging that a claimant’s circumstances differ from those declared. Local authorities may also be involved, particularly in Housing Benefit matters.

Government guidance confirms that the DWP may take no action where, for example, a person has already declared a change or the reported circumstances do not affect their benefit. Evidence of a failure to report a change in circumstances is therefore not proof that fraud has taken place.
Investigators may compare benefit records with information held elsewhere and gather as much evidence as possible before deciding whether to take further action. Depending on the allegation, that can include checks relating to employment, income, savings, bank accounts, addresses or household circumstances. DWP investigators have statutory powers to obtain relevant information from specified third parties where this is necessary and proportionate for a fraud investigation.

What evidence can benefit fraud investigators collect?

Benefit fraud cases are often built from documents and data gathered from several sources. Investigators may compare what was declared on a claim with financial, employment, and household information obtained later.

Evidence may include:

• Benefit applications and records of reported changes
• Bank statements and other financial information
• Payslips, employment records and HMRC information
• Tenancy agreements, council records and address information
• Messages, letters and other communications with the DWP or local authority
• Witness evidence, surveillance or documents supplied in support of the claim

The evidence still needs to be interpreted correctly. A bank payment may look like undeclared income but have another explanation. An address on a record does not necessarily prove that a partner was living there as part of the same household. A discrepancy between forms may result from confusion rather than deliberate deception.

Our role is to test what the material actually proves, identify evidence that has been overlooked and challenge conclusions that go further than the records justify.

What happens if you are asked to attend an interview under caution?

An interview under caution is a formal part of a benefit fraud investigation. Fraud Investigation Officers may ask a person to attend one, and this will often be recorded and can become part of a criminal investigation. What is said at interview will influence whether the case ends without further action or develops into a prosecution. Therefore, if you are invited to attend such an interview, it is imperative you speak to our solicitors first.

You should not treat the interview as an informal opportunity to clear up a misunderstanding, as approaching the process without preparation can lead to incriminating yourself. Investigators may put bank transactions, benefit records or alleged inconsistencies to you and ask detailed questions about what you knew at particular points in the claim.

Before the interview, your solicitor from Tyler Hoffman will establish as much as possible about the allegation, review the available evidence and advise you on how to deal with questioning. We will challenge unclear assumptions and protect your legal position from the outset.

What can happen after a benefit fraud investigation?

Where the evidence does not establish a criminal offence, the matter may end without prosecution. In other cases, there may still be an overpayment that the DWP or local authority seeks to recover even though criminal proceedings are not brought.

Possible outcomes include:

• No further action
• Recovery of overpaid benefit
• An administrative financial penalty
• A criminal prosecution
• A fine, community sentence or custodial sentence following conviction, depending on seriousness
• Reduction or loss of certain benefits following conviction
• Confiscation proceedings where the prosecution alleges a financial benefit from criminal conduct
• Crown Prosecution Service guidance on welfare fraud makes an important distinction: an investigation may consider both whether benefits should have been paid and whether a criminal offence has been committed. An overpayment does not automatically establish criminal liability.

If confiscation proceedings follow a conviction, Tyler Hoffman’s Proceeds of Crime Act solicitors can challenge the prosecution’s assessment of criminal benefit and the assets said to be available to satisfy an order.