Sunday, March 01, 2015

Dole Bludgers

Every magistrate will be familiar with cases brought by the Department for Work and Pensions against people who have claimed benefits to which they are not entitled. Sometimes it is a claimant who manages to get a job, and fails to declare it, sometimes it is failing to own up to living with someone else while claiming single-person benefits. Most people I have seen are women, ranging from young claimants who apply for nursing training and fail to declare the bursary to which they are then entitled to young mothers who allow lover-boy to move in on the quiet.
In no time at all the amount overclaimed runs up to some enormous figures, especially once housing benefit and suchlike is factored in. In suburban London a not-too-special one bedroom flat can easily cost £700 per month. A recent case involved overclaims of over £22,000 piled up over a mere 78 weeks.

We imposed a period of unpaid work as the only realistic option, and as often happens there was no claim for compensation because it is now policy for the paying authorities to carry out their own enforcement procedures. We imposed minimal costs, because there was no chance that they would ever be paid.

I let my house for a couple of years some time ago, and the tenant's business went bust after about eight months. Housing benefit was paid directly to me by the council, and that worked fine. I have no idea why the system was changed to give the cash directly to the tenant - it looked like asking for trouble to me.


  1. Lunacy that's why.
    The more people are taken care of by direct payments to utilities , landlords , TV licencing etc the less likely the poor claimant will get in trouble.

    It is ironic that you can fiddle millions, be as slippery as an eel and dishonest as the day is long and bugger all happens. On the otherhand if your down on your luck, at the bottom of the pile and have no prospects the state kicks you in the teeth.

    I want to live in a compasionate society where we look after the unfortunate. Ok it should not be a free ride and if your on the natkingcole you might have to do something for the community but prosecuting pmost of these sad cases borders on torture.

  2. " I have no idea why the system was changed to give the cash directly to the tenant - it looked like asking for trouble to me. "
    Quite agree, another example of the State making things worse, like HIPS

  3. Surely where the money is paid is irrelevant - the point is that the public purse was defrauded. Whether the money is paid to the claimant or to the landlord does not change the fact that the claim itself was fraudulent.

    I have seen some cases that were dishonest from the outset and some that began legitimately but circumstances changed and the claim continued. I've yet to see a case brought where the defendant hasn't deliberately signed multiple claim forms that they knew to be untrue.

    A fraudulent claim of £22k over 78 weeks equates to more than the NMW for a full-time job (without taking tax and NI into account admittedly). My sympathies are with the people slogging their guts out for £6.50 an hour, not with those who lie so that the rest of us subsidise their lifestyle.

    1. Bystander's point is that It is very relevant if you are a landlord. Under the old system the State paid you the rent. Under the current system the tenant is supposed to pay it but he/she may give it a lower priority than other demands on his/her income

    2. Here, here!
      But I think the main thrust of the original topic was not about fraud but that it is about giving the money directly to the claimant rather than e.g. the landlord. The chaotic and, often, feckless, lifestyle of many inevitably results in mismanagement of the money. This is where the "Asking for trouble" comes from. No doubt the tobacco industry and high street betting shops have enjoyed something of a bonanza from those who are stupid enough to blow their benefits on such things.

      Personally I think it's a good idea to make the individual responsible for their own lives. There is plenty of financial help and advice around (for free) for those who can be bothered to seek it out.

    3. Anonymous 16:26 again4 March 2015 at 14:34

      I'm sure landlords in that sector would much prefer to have a steady stream of cash from the State. But they've chosen to be in the property business and dealing with bad tenants and collecting debts is part of that.

      I imagine that the overwhelming majority of people in receipt of housing benefit see keeping a roof over their head as a priority. I've certainly never seen a benefit fraud case where someone has ended up homeless as a result of spending their housing benefit on fags or horses. That would be one hell of a cigarette or gambling addiction.

      Most people can be trusted to do the right thing, so why base policy around the few who can't?

  4. I think the change to paying the HB to the claimant was ideological; it was intended that the claimant have a life experience closer to the world of work, where budgeting and self-restraint in spending is necessary. It also gives the claimant more negotiating power with the landlord, like a private tenant would have.

    This seems like a good idea to me, although it may take some getting used to by people who were previously spoon-fed.

  5. I remember that this was the reason given at the time. I think, perhaps that there may have been a more subtle reason. (Here I should confess that as I get older I have become more and more cynical about politics)

    The real reason could concern poverty. In my youth there was real poverty. As the years went by, and the country became richer, poverty decreased dramatically. This concerned the “poverty industry” who realised that they would soon be unemployed. So they cleverly changed the definition from the previous, and fairly obvious, “absolute poverty” to the new “relative poverty”. They rigged this definition in two ways. Firstly they set the boundary for family income to sixty percent of the national median value, and, secondly, they excluded benefits in kind.

    At the end of the last government there were many families in receipt of total benefit packages exceeding a hundred thousand pounds per year. One had a package of one hundred and seventy thousand pounds per year. All this was, of course, tax-free.

    Since most of these benefits were benefits in kind (for example, housing benefit, council tax relief, free school meals, etc.) some of these families may have been considered to be living in relative poverty.

    One of the measures used to judge governments is child poverty:- the number of children living in poor families. So by paying the housing benefit directly to the families rather than to the landlord, the government of the day (and I actually can’t remember which one it was), at the stroke of the pen and at no extra cost to the Treasury, lifted tens of thousand of families, and therefore children, out of poverty.

  6. Anonymous 6 March 2015 at 15:17:

    Unless you have any facts to back up your assertion on the 'poverty industry' then that is all it is. Measures of poverty have been the subject of rigourous academic research over several decades. the relative measure has been in use for at least 40 years. The 60% boundary is an internationally accepted measure.

    The changes to housing benefit were introduced by the Labour government in 2008. The current goverment says in its consultation paper (Measuring Child Poverty: A consultation on better measures of child poverty, 2012): "The most recent child poverty statistics revealed a large reduction in the number of children living below the relative poverty threshold. However, this was largely due to a fall in the median income nationally that pushed the poverty line down. Absolute poverty remained unchanged and the children who were ‘moved out’ of poverty were in
    fact no better off than before."

    Regarding housing benefit exceeding £100,000, this is entirely related to the cost of housing in places like London and not relative poverty. Social housing has been sold of without it being replaced (Councils not allowed to borrow to build) so Councils are forced to rent in the private sector. The biggest beneficiaries of housing benefit are in fact private landlords and not poor families! Building social housing would do more to reduce the housing benefit bill than anything else.

  7. Anonymous 7 March 2015 at 07:29

    Several contributors (including Bystander: “I have no idea why the system was changed to give the cash directly to the tenant - it looked like asking for trouble to me”) were wondering why a Government would change the payment of housing benefit from landlords to tenants, causing, in significant number of cases, difficulties for the tenants who then ended up in court.

    I was suggesting (tongue partly in cheek) that by paying the cash to the tenants directly, many tenants who had previously been considered poor would then, magically, appear above the poverty line. They would not actually be any better off and the change would not cost the Government any extra resources. The reason they would no longer be poor is because, under the relative poverty definition, benefits in kind are not counted as income, but cash is.

    The only major difference I could see would be a significant decrease in the child poverty rate, which would make the government look good.

    I was suggesting that this was the main motivation for the change rather than the “touchy-feely” suggestions made by other contributors.

  8. Sorry, difficult to discern tongues in cheek in text!

    Are you sure about this cash issue? gives the calculation as:

    "Poverty measures use net income – that is, total income minus direct taxes (income tax, national insurance and council tax) and plus the value of any social security benefits received. This is the income that people have available to buy goods and services."

    Thus there should be no change in income when the housing benefit is paid direct to landlord or cash to tenant.

  9. I heard recently that one of the measures of poverty is where three or more children have to share a bedroom. That isn't poverty. Real poverty is whole families, and often more than one, living in the same single room. For real poverty look to parts of Africa, India where I have seen families living in a tent on a roundabout and the Far East.

    1. By which logic Ben Nevis can’t be a real mountain because mountains in other parts of the world are much higher!

    2. By which logic then I am a poor man since I have less than the millionaire.

      The fact is that all comparisons are relative but that does not invalidate such comparisons. Those who regard themselves in poverty in this country have so much more than those in poverty elsewhere.

    3. Yes, but they aren't elsewhere, they are here!

    4. Poverty doesn't have to be abject. It is perfectly possible for poverty to be judged in comparison with others in society.

      If people living in the UK in what we currently define as "poverty" are not in fact poor compared to people in third-world countries then what is your point? That we should not treat them as poor? We should not try to lift them from poverty until such time as they find themselves living in huts without even clean water to drink?

      Once upon a time people did live like that here. Judging what is or is not poverty today against the appalling state of the past (or other countries) is not something that we should be doing.

      If somebody lacks funds in the UK today then they are less able (or unable) to take part in normal activities of society. If a person cannot take part in society then it seems to me that they are poor and living in poverty.

  10. Sometime in the early to mid 00's the DWP compared their databases with those of HMRC so they could see who was claiming while earning interest on savings.

    Queue a HUGE run of cases involving little old ladies who had spent a lifetime working and managed to save up a pitiful nest egg to pay for their own funerals being prosecuted for failing to declare their savings. The one that always stuck in my mind was a retired nurse who worked for the British Army in warzones before joining the NHS until she retired. She had about £1,000 saved up to show for all that work. She explained to me that she hadn't declared it as it wasn't hers... it was so her family didn't have to pay for her funeral when she died and so she could maybe leave £100 each to her grandchildren.


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