Recent Developments In Benefit Fraud Legislation

Benefit fraud costs the UK upwards of £2 billion every year that has to be found from taxpayers’ funds. However, in an attempt to stem the outflow of funds, the authorities are sometimes a little too zealous in targeting the benefit cheats and can cause distress and hardship to some who have made simple mistakes when claiming or been put at a disadvantage by an errant spouse or partner. At Mark Jenner & Co Limited we have seen many cases involving benefit fraud, and in some cases have been able to temper the Crown’s efforts and mitigate the issues involved so that the outcome is more reasonable.

On one notable occasion, the Crown dropped their case when they learned that a forensic accountant had been appointed by the defence team! On a couple of occasions where substantial alleged benefit losses were at issue, prison sentences were replaced by community service and in other cases the Judge took into account the forensic accountancy findings and reduced the sentences accordingly.

There is clearly a big problem in the UK with benefit frauds, and we are happy to act as independent “mediators” in certain cases where the Crown may have jumped the gun or is ignoring mitigating circumstances. It will be interesting to see how the Crown Prosecution Service approaches benefit fraud now that it has taken over its prosecution from the Department for Work and Pensions’ in-house legal team. Mr Kier Starmer QC speaking for the CPS has indicated in September 2013 that a tougher approach will be taken, with more benefit fraudsters being tried under the Fraud Act 2006 that allows harsher penalties – including prison terms up to 10 years as opposed to 7 years under specific social security legislation. Moreover, even basic benefit cases tried in this way will avoid being heard in the Magistrates Court moving directly to the Crown Courts.

The Government is currently rolling out the new “Universal Credit” benefit system that will in time replace the whole range of previous benefits such as Income Support, Invalidity Benefit and Tax Credits. Crossing over from the old cumbersome system to something new is bound to cause confusion and mistakes will be made, by claimants and the authorities alike. Coupled with the increased use of the Crown Courts to target the fraudster, this will inevitably mean more defendants seeking forensic accountancy advice going forward.

At Mark Jenner & Co Limited our approach to dealing with benefit fraud is twofold. Firstly we unpick the actual financial circumstances, setting out clearly the quantum of household income actually enjoyed (separating benefit and other income streams). Then we apply broad brush benefit calculations to present actual entitlement if proper disclosure had been made. Sometimes this can bring the actual loss to the Crown to below the level of a prison sentence trigger.

Benefit fraud is a drain on the UK’s resources and should be dealt with robustly by the authorities. However, there are often cases where the full picture is not clear and a forensic accountant’s report can clarify and mitigate the matter. However, care should be taken as a full forensic examination of a person’s financial affairs could well reveal additional sources of undisclosed income and provide indicative evidence of more serious crimes!

Read other articles about benefit fraud:

Dealing With Supplementary Benefit Claim Mistakes

Defending allegations of benefit fraud

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About Mark Jenner

Mark Jenner is an experienced forensic accountant specialising in fraud and white collar criminal matters. He provides independent financial investigation and expert accounting witness services to police forces, fraud regulators and criminal defence lawyers, also providing assistance and solutions to organisations embroiled in financial disputes.

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