Prosecuting fraud (again)

I contributed yesterday to Radio Scotland’s ‘Call Kaye’ programme, discussing the proposition that social security fraud needs to be prosecuted more vigourously.   The prominence of social security fraud in reports has always been troubling.  The constant harping on fraud, over more than forty years, has poisoned relationships between claimants and benefits agencies.  The level of fraud has been greatly exaggerated; the focus on fraud in benefits, estimated to be 5.5%  of fraud against the government, is disproportionate; reports about individual frauds are usually inflated, because they discount the money that people should have received instead; sentences are already harsh.   Rather to my surprise, most callers took a similar line.

It’s fair enough to say that where there is deliberate fraud or organised crime, it’s anomalous to treat it as a distinct offence under the social security legislation – there is not much difference in principle between defrauding social security and defrauding a bank.   At the same time, what people mean by ‘social security fraud’ is not usually ‘fraud’ in that sense.  People receive money they’re not entitled to for all sorts of reasons, most usually when their circumstances change and they don’t inform the benefits administration.   The three largest categories are when they have an occupational pension which is not declared; when they are sleeping with a partner they haven’t declared; and when people get some work and don’t declare it.  Those are not quite in the same class as counterfeiting identity papers or hacking the payments system.

The problem with occupational pensions is an example of a more general issue; people aren’t always clear about what has to be declared and what doesn’t.  When we had insurance based benefits, other sources of income didn’t matter.  The second problem, ‘living together’, is one I’ve referred to several times; the questions are intrusive, people aren’t open about their relationships, and while sometimes people lie, others couldn’t describe their relationships in the terms that are required.

Working while claiming seems to excite the greatest passion and condemnation – which is perhaps surprising, because people who are working are doing exactly what successive governments say they want people to do.   If you want to get yourself job-ready, to show willing to work, or to move up the ladder into secure employment, working whenever the opportunity presents itself is surely the way to do it.   However, the flexible job market doesn’t give security, adequate wages or  even certainty about whether or not you’ll be paid – and people in that position are ‘fiddling’.  There are ways to organise benefits that allow for some casual work – for example, providing benefits over six months (the old rule for Family Income Supplement), taking income over a six week or three month period, and of course providing universal benefits like Child Benefit that aren’t touched by fluctuating incomes.  What we’re about to get instead in Universal Credit is a system that is going to bounce the level of benefits up and down like a yo-yo, while demanding that claimants bear the cost of any mistake, regardless of who has made it.

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