DWP Publishes First Fraud Figures For Troubled Universal Credit

The Department for Work and Pensions (DWP) has published its first error and fraud findings for Universal Credit (UC), finding that underpayments due to official errors were significantly higher than for the older Jobseeker’s Allowance (JSA) programme, while the rate of overpayments was statistically the same.

UC is intended eventually to bring a wide range of benefits into a single system, but its delayed rollout has hampered the DWP’s efforts to manage “unacceptably high” rates of fraud and error, auditors said last year.

Complex cases

The new figures are the first to indicate overpayment and underpayment figures for the new system, but the DWP said no direct comparisons could be made with JSA as the new benefit is being gradually expanded to include a wider range of claim types.

“Although the majority of UC claims start out as the equivalent of a simple JSA claim, such as a single person without children or housing costs, they can change their circumstances over time and remain on UC,” the DWP said in its findings, which were published as part of a wider range of benefit figures.

“We estimate that 35 percent of the UC caseload was in employment and 36 percent of the caseload had housing costs, making these cases more complex to administer.”

The total rate of overpayments on UC was 7.3 percent, higher than JSA’s 5 percent, but the DWP said the difference was not statistically significant.

Since UC is still in trials, expenditure was much lower on the benefit, totalling only £477 million for 2015/16, compared with JSA’s £2.4 billion in 2015/16, and as a result the monetary value of overpayments was also lower, at £35 million, compared with £120 million for JSA, the findings reported.

The fraud overpayment rate was 5.4 percent, compared with 3.1 percent for JSA, a difference the DWP said wasn’t statistically significant.

Rise in official error

Underpayments, meanwhile, were estimated at 2.6 percent, higher than JSA’s 0.8 percent, and the DWP said the difference was statistically significant in this case.

The monetary value of UC’s underpayments was £13m, with the majority being due to official error, the DWP said.

The rate of official error underpayments was 2.3 percent, significantly higher than JSA’s 0.7 percent, the DWP said, while the claimant error rate was 0.4 percent, compared with 0.1 percent on JSA.

The National Audit Office (NAO) said last year that levels of fraud and error in benefit provision were “unacceptably high” and pointed to the need for better management of data.

The delayed rollout of UC, which is currently undergoing trials in eight UK job centres and relies on an IT system that is still in development, was seen as hindering the DWP’s efforts to improve its record on fraud and error. UC’s rollout is currently not expected to be complete until around 2020.

‘Urgent action’ needed

Following an overhaul of the programme, government watchdog the Major Projects Authority (MPA) found last year that the scheme’s lifetime cost had gone up by 20 percent, to £15.8bn. The MPA said the programme was in need of “urgent action” and warned it was in danger of failure.

The programme has said it is evaluating whether it will use the government’s Gov.uk Verify identity assurance platform, which is also at the trial stage and is rolling out gradually.

Gov.uk Verify, set to officially go live this week following delays, is intended ultimately to replace the Government Gateway, but no timeline has yet been suggested for phasing out the older service.

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