Spiralling fraud and overpayments in the benefits system now stand at the highest rate ever recorded, admits the Department of Work and Pensions (DWP), as it identifies housing payments as an area of concern.

Housing benefit fraud is particularly rife after the pandemic resulted in more relaxed checks to ensure a record number of new Universal Credit claims – up from three million to six million – could be processed and paid.

To help people with their housing costs, DWP administered some £30 billion of housing support through Housing Benefit and Universal Credit during 2020-21, with additional financial assistance paid through the Local Housing Allowance.

Excluding State Pension, DWP estimates it overpaid £8.3 billion of the £111.4 billion that it spent on benefits during 2020-21, an increase of £3.8 billion on the previous year.

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Nearly all of the increase in fraud and error was on Universal Credit; DWP estimates it overpaid £5.5 billion of UC (14.5%) and underpaid £540 million (1.4%).

The DWP has identified four key fraud and error risks; it wants to improve controls over incorrectly reported self-employment earnings, savings, living arrangements and housing costs.

NAO boss Gareth Davies (pictured) says the issue has a real impact on public funds and on those who face deductions to their income due to overpayments.

He adds: “I recognise that the pandemic and the resulting surge in the number of claimants has increased DWP’s exposure to fraud and error.

“It must now review all cases that could have been subject to fraud during this time, whilst continuing to progress our past recommendations on how to reduce fraud and error.”

Read more about DWP payment problems.

8 COMMENTS

  1. No doubt those poor landlords that accepted payment directly from the benefit system will learn how big the authorites killer claws are when massive clawback starts. After all, tenants are all wonderful lovely (some are by the way!) people who never commit crime or any wrong doing whilst the Government view is that all landlords are crooks. The benefit I guess of wearing political polarizing glasses; be they with a blue, red or orange tint.

  2. The Universal Credits system is in shambles. We had a tenant receiving UC benefit from Croydon Council but not passing it on to us since March 2020. Both we and our letting agent wrote to the Council complaining about this tenant and requesting the the tenant’s UC rental payment to be made to the landlord but to date we have not even received acknowledgements to our emails/letters – absolutely appalling. In the meantime the rent arrears kept on building up to over £10k. Thank God that the tenant abandoned the property – at least we got our property back although it had been left in a state of a mess costing us over £6K to make it habitable again. The Universal Credit system needs a complete overhaul. We are certainly not going to be taking on any more benefits tenants. And many other landlords feel the same. This will result in loss of housing for such tenants who then the council will have to re-house using tax payers money. But the incompetent council staff will not do anything about this. No wonder Croydon had gone bankrupt and had to be bailed out by the government via a payment of millions. Why does not the government do something about this? I hear that other councils in England are the same!

  3. I would never entertain Benefit claimants.

    I have a business model where I provide high quality accommodation with a rent level that reflects that quality.
    This effectively prices out those that have financial difficulties.

    No one defaulted during the lockdowns, my tenants’ value nice accommodation and prompt service and I have a waiting list of prospective tenants and my current tenants know that.

    If required (At a cost of course) I can provide gardening services, window cleaning etc

    All of the properties are built after 1990, all have EPC C apart from one that is D but that will be remedied easily before 2025.

    I leave the lower end of the market to others I have tasted it in the past and stay away these days.

    • I don’t believe the lower end of the market will be viable in a few years.
      EPC problems being the main cause.

      A former tenant of mine is doing EWI at £10000 a pop.
      It would take decades to achieve payback on that.

      Far better to sell to a mug FTB.

      Just not worth investing in low value properties which won’t achieve any value uplift by being EPC C compliant.

      LL will be abandoning the lower quality PRS leaving millions of homeless tenants.

      Where will Councils put them!?

      • Totally agree Paul… the UK population has risen by 9 million since 2000. How many council / housing association properties built?

        Yea almost none.

        It was the PRS that stepped up and brought lots of run down properties back to life…

        The reward is to be shafted by the govt… I will not be expanding the portfolio and will most likely continue to reduce it as tenants gradually move on.

        It will take a few years of gradual decline of the PRS, maybe even a decade as LL’s pull out for the “Crisis” to manifest itself then govt may well end up requisitioning hotels to house the homeless just at they put thousands of dinghy boys in hotels already.
        Country is going to the dogs mate.

  4. Well we all have to learn sometimes .Definitely NO more cheating lying benefit tenants for me ,never again no matter how many times they will lie and say we will never let you down but that’s exactly what they do.
    I am thinking of leaving residential investment to commercial .I jus had enough of bad tenants and their problems . I will just leave my central London properties for capital gain, and nice professional responsible tenants.

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