Daily Telegraph - Sickness benefit blunders cost pounds 500m

Thursday, 1 March, 2007

FRAUD and errors in sickness benefits have cost the taxpayer half a billion pounds over the last six years, figures have revealed.

There was pounds 110 million of incapacity benefit overpayments as a result of bogus claims or mistakes last year alone, nearly twice the pounds 60 million lost in 2000-01.

The figures also reveal there has been a three-fold increase in the amount of money being lost as a result of errors by benefits staff, up from pounds 30 million to pounds 90 million last year.

On top of that, pounds 120 million was lost over the last six years as a result of mistakes by customer, while fraud over the same period cost pounds 50 million.

The figures were uncovered in parliamentary answers to David Ruffley, the Tory shadow welfare minister, who said people would be staggered at the amount of money being lost.

Around 2.7 million people claim incapacity benefit at a cost of pounds 12 million a year to the taxpayer. Claimants are paid up to pounds 78.50 a week, around pounds 20 more than Jobseekers' Allowance.

Mr Ruffley said the figures exposed the "complexity of a benefits system that bamboozles not only vulnerable claimants on incapacity benefit, but the very officials who are meant to be administering it. What is worse ... many vulnerable incapacity benefit claimants faced a claw back of overpayments caused by this dud payments system''.

Ministers have pledged to replace incapacity benefit with a system which they claim will aim to get as many claimants as possible back to work.

The Department for Work and Pensions said it had launched a campaign to cut official and customer error and save pounds 1 billion by 2012.

A spokesman added: "We have a strong record on tackling fraud in the benefit system and have reduced total benefit fraud by two thirds since 1997.''