Department for Work and Pensions Accounts 2019-20

Even before COVID-19, fraud and error overpayments were at their highest ever rates, with around...

Even before COVID-19, fraud and error overpayments were at their highest ever rates, with around £1 in £10 of Universal Credit paid incorrectly. The estimated overpayment rate, excluding State Pension, now stands at 4.8% (£4.5 billion) of benefit expenditure of £93.1 billion for 2019–20; this is the Department’s highest ever … Read more Even before COVID-19, fraud and error overpayments were at their highest ever rates, with around £1 in £10 of Universal Credit paid incorrectly. The estimated overpayment rate, excluding State Pension, now stands at 4.8% (£4.5 billion) of benefit expenditure of £93.1 billion for 2019–20; this is the Department’s highest ever estimated overpayment rate. The Department does not currently have a target rate of fraud and error, although it has now publicly committed to setting one once it has established a clear baseline. We look forward to the Department finally setting fraud and error targets after several recommendations to do so by this Committee in recent years. Of all measured benefits, Universal Credit has the highest estimated overpayment rate - 9.4% (£1.7 billion) for 2019–20 - and it has an estimated underpayment rate of 1.1% (£0.2 billion). Fraud and error in Universal Credit is set to increase significantly in 2020–21. As a rough estimate, a doubling in caseload alone (ignoring the effect of easements to controls) could cause around £1.9 billion of additional fraud and error in Universal Credit. Recommendations: The Department needs to show sustained progress in reducing fraud and error. It should set annual targets, by risk and benefit, against which its progress can be assessed, based on its expectation of the intended impact of its counter fraud and error initiatives over time. These should be set out and reported against in its Annual Report and Accounts for 2020–21. For Universal Credit, the Department should set out its plan for year-on-year reductions in fraud and error, assessing performance against short-term, achievable targets. Show less