Benefits bill overpayments hit £3.1 BILLION in a year - and a third of that was down to bungling officials
By Mail Online Reporter
Last updated at 12:12 PM on 17th June 2010
That is compared to just 12per cent in 2000/01, when mistakes cost £400million.
The estimated total benefit expenditure, geniune and overpayment, amounts to £148 billion each year.
'This is a stupendous amount to be lost through fraud and mistakes,' he said.
'The system is too complicated to understand and administer, simplifying the way benefits are handed out would mean less mistakes and less waste of taxpayers' money.'
Official error led to overpayments of £200 million in housing benefits alone and a further £150 million in pension credits.
Fraudsters claimed £260 million in housing benefit, £240 million in income support and £120 million in jobseekers allowance.
And customer error, where customers gave incorrect information or failed to update their details cost a staggering £420 million.
Overall a massive £880 million in housing benefit - 4.4 per cent of the total budget of £19.9 billion - was paid out by mistake.
Another £480 million, was wrongly paid in income support, making up 5.7 per cent of the total budget of £8.5 billion.
But on the flip side, the significantly lower amount of £1.3bn or 0.9 per cent of total benefit expenditure was underpaid as a result of customer or official error.
Meanwhile levels of overpayments due to benefit fraud have fallen over the last decade from £2.2 billion in 2000/01 to the current £1 billion sum.
Minister for Welfare Reform, Lord David Freud, said that the DWP was working to reduce the amount of overpayments.
He said: 'The decrease in the overall levels of fraud and error in the benefit system demonstrate the seriousness with which the Department for Work and Pensions takes this issue.
'These are the first results to take full account of the economic downturn and reflect the significant increase in the benefit caseload within the last year.
'However, the rise in the error figures for out-of-work benefits demonstrates that the system has now grown far too complex and is in need of radical reform.
'That is why the Secretary of State for DWP will be setting out his plans for overhauling the welfare system.'
The report was released by the DWP at the end of last month along with the State of the Nation report which found that families are able to claim up to £100,000 a year.
Secretary of State for DWP, Iain Duncan-Smith, announced the following day that the over-generous benefit system meant claimants branded workers 'bloody morons'.
An estimated 670,000 households were found eligible for benefits and tax credits worth more than £15,600 a year in 2009/10.
Of these, 50,000 households were allowed to claim benefits worth over £500 a week, or more than £26,000 a year. The average UK annual wage
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NEARLY £100 every second was incorrectly paid in benefits last year as blunders cost taxpayers more than £1billion, official figures revealed yesterday.
A total of £3.1billion was overpaid through fraud and error in 2009-10, the Work and Pensions Department confirmed.
Two-thirds of that was blamed on fraud and customer error.
But mistakes by DWP officials were responsible for a staggering 35 per cent of overpayments, costing a record £1.1billion.
Admin errors accounted for 12 per cent or £400million over-payments in 2000-01 and 26 per cent costing £800million in 2008-9.
The damning figures show the havoc wreaked over 13 years of Labour government by Gordon Brown’s reckless determination to add layer upon layer of complexity to the welfare state. The latest sum lost is exactly half the £6.2billion of spending cuts the new government announced it would be making this year through savings.
Matthew Elliott, chief executive of the TaxPayers’ Alliance, said: “This is a stupendous amount to be lost through fraud and mistakes. When the Government is talking about making £6billion of spending cuts, this figure puts into perspective the urgent need for welfare reform.
The system is too complicated to understand and administer. Simplifying the way benefits are handed out would mean fewer mistakes and less waste of taxpayers’ money.”
The coalition Government has pledged to simplify welfare, saying that recipients and taxpayers’ will benefit. Welfare Reform Minister Lord Freud stressed there had been some progress over recent years. “The decrease in the overall levels of fraud and error in the benefit system demonstrate the seriousness with which the Department for Work and Pensions takes this issue,” he said.
Details revealed in the DWP report included how official error led to overpayments of £200million in housing benefit and a further £150million in pension credit. Error by customers giving incorrect information or failing to update their details cost £420million. A massive £880million in total was paid out by mistake in housing benefit and another £480million was wrongly paid in income support.
Fraudsters claimed £260million in housing benefit, £240million in income support and £120million in Jobseekers’ Allowance. But overpayment through fraud has fallen over the last decade from £2.2billion in 2000-01 to £1billion now. Meanwhile, some £1.3billion was under-paid as a result of customer or official error, according to the most recent figures.
Work and Pensions Secretary Iain Duncan Smith has vowed to simplify the system, saying complexity traps people in dependency because it is practically impossible to work out what they will get if they work. Recent analysis showed people can be on more than 1,000 combinations of benefits.
A Government report has revealed that some 50,000 households are getting more than £500 a week, or £26,000 a year, in state handouts – which is more than the average wage of around £25,000. A total of 670,000 families are eligible for £15,600 a year in benefits and tax credits, costing taxpayers £13billion a year.
The poorest 20 per cent of households get 58 per cent of their income from state support.
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