Friend caught for benefits fraud....

MercilessKiller

Hi All,

Had a very sad call from a good friend of mine today. She's a single mother of 2 kids, and is currently on benefits in order to support them and herself such as housing/income support/child credits benefits (i'm not sure the exact name of them all).

Basically one of the fathers has been a real real nasty piece of work. He was a bit too violent so she left him, though he was blackmailing her for months trying to get her to stay with him. Either way, the result is, he's reported her for benefits fraud to try and get back at her, even though he doesn't provide any support towards his child... Odd move.

Anyway, the fraud is, when they broke up she was really ill with severe depression. She got treatment and has been getting progressively better (her mother was looking after her kids during the treatment, but since getting better she resumed looking after them).

For a while she just stayed on benefits as she focused on getting better, though recently she's started trying to find a way to get some income so she could come off benefits and move somewhere else as she's not in a great area, so she started making and sellings things on ebay (average item sells between £1 and £2...) - She only started doing this properly within the past 4 months, and just makes a little to help with the kids.

She's also on a modelling site and every now and then gets a one off shoot, though also does modelling shoots for being paid to go on a night out or something...

Either way, yes, she's been making a little bit of money now and again while she finds a way to get an income to come off benefits, but she's been reported for having an ebay business and her modelling work while claiming...

She doesn't have a record of any payments from modelling, and she has a record of her sales on ebay though a lot of it goes back into buying new things to sell.

Now, I'm not looking for a moral debate on whether she should/shouldn't be doing it. I'm not defending what she's done (in any way) or the way she's done it, but I'm a friend and I said I'd try and help and find out where she can go from here.

She received a letter this morning saying she's been reported and an investigation will begin. She has no idea what's going to happen and is in an absolute state... If anyone can provide any advice on:

1) How long things will take to happen (I imagine the next step is an interview?)
2) What's the likely outcome from this situation
3) If she loses her benefits, she'll simply not be able to afford rent or to support her kids, as her work is so inconsistent and small it's not an income... So what options are there for her?

Would appreciate any advice, and once again, please don't just post insults for what she's doing. I know very well how wrong it is, but it's all about recovery mode from now on and where she can go from here.

Thanks MSE'ers!

Benefits_Bod

MercilessKiller wrote: »

...alleged fraud...

Over the weekend, subject to being up to it, I'm hoping to compile a large post to be added to the site which will cover the basics of what may or may not happen / be relevant in cases of alleged fraud.

In the meantime, one very simple piece of advice. If your friend is asked to attend an IUC, she should absolutely be accompanied by someone who knows benefits and, ideally, knows at least a bit about "PACE" procedure. If, for whatever reason, she is unable to get someone to attend with her, my advice would be to "no comment" throughout. The reasons for this advice will be covered in my post which will eventually appear.

Although your friend says she has no evidence of the monies paid for modelling, she will presumably be able to identify the person(s) from whom the monies were received? If so, it is reasonable for the DWP and/or local council to ask for that information. My advice would be for her to provide the info.

Finally, how many hours per week (on average), was your friend working? That means the modelling AND ebay trading combined.

{Edited to add} PS: Hope you have your rhino hide handy - some posters won't be the least bit interested in whether your friend *may* actually still be entitled to benefit, even if she has been earning.... You're warned :-)

MercilessKiller

Hi Benefits Bod, thanks for the reply - I am aware some MSE'ers will simply post to flame her unfortunately. I don't want a debate on whether it's right or wrong and I'm keeping my opinions out of it.. I just want to try and help her get back on track really

I asked her how many hours and she's really not sure... she'll spend a few hours making a load of stuff she'll sell over the course of a week, and as the modelling is so inconsistent one week she may do 3 or 4 hours, the next week not even 1 hour!.. Never more than 6 hours per week though.

She could indeed identify those people (One of the common ones is a close friend of hers)

red_devil

I think if it were me i would try and keep calm and go to the meeting she will be asked to put her side. Just tell the truth.

They always hear the other side as they are aware that people can make things up to be nasty!

MercilessKiller

Just spoke with her again.. apparently they sent her a letter 2 weeks ago asking her to visit their offices. When she visited today they told her she's been investigated which is how she found out. They also asked her a few questions and she panicked and denied it.

Is this what the IUC is or would that be something different?

She has a tendancy to try and deal with everything without asking for help.. looks like she's got herself into a right mess now!

She's offered to ring the guy up and tell her she did do it and just panicked, and that she's now registered as self employed and will declare.... Whats her best option?

red_devil

make sure they look into why he dosent support the children either?

Benefits_Bod

MercilessKiller wrote: »

Never more than 6 hours per week though.

That is a critical piece of information. On that basis, she is not barred from IS on the grounds of being in what is called "remunerative work". So, the only issue will be whether the amount of her earnings is, in itself, sufficient to end IS entitlement. Even if it is, she may *still* be entitled to HB/CTB if her earnings were low.

She needs to compile as much information as she can about hours / income in relation to both the modelling and the e-bay sales. In respect of the items sold on e-bay, did your friend spend money to purchase materials? If so, those would (normally) be legitimate expense. Further, any travel expenses incurred for the modelling would also be allowable. In fact, in respect of either types of work, most expenses reasonably incurred for business purposes should be deducted from the gross income (although there are some exceptions).

As a lone parent, the first £20 of weekly earnings is disregarded for IS purposes (it's £25 for HB/CTB if not on IS).

If your friend did not disclose the above changes in her circumstances, any resulting overpayment will undoubtedly be recoverable. However, that doesn't necessarily mean a criminal offence has been committed. That depends on the the reason(s) why the changes were not disclosed - only she will know that. In that context, I reiterate the advice given above in relation to IUCs.

IF the DWP and/or the LA seek a prosecution it is imperative that she finds a solicitor practising in criminal law AND, absolutely just as importantly, she instructs / insists that the solicitor obtains the services of an expert witness familiar in social security law - an accountant or similar is simply a waste of everyone's time. Hard as it may be to believe, solicitors in cases of alleged benefit fraud simply don't appreciate the importance of the "civil" side (such as checking the decision making and/or making appeals to Tribunals) in relation to criminal proceedings.

Needless to say, if your client has any further changes, these should be disclosed.

{Edited} PS: If YOU end up helping in the sense of conveying information on behalf of your friend, make sure you convey it "as a scribe".

DX2

red_devil wrote: »

make sure they look into why he dosent support the children either?

They aren't interested in why a father doesn't support children. Their remit = benefit fraud.

Hammyman

MercilessKiller wrote: »

She received a letter this morning saying she's been reported and an investigation will begin. She has no idea what's going to happen and is in an absolute state... If anyone can provide any advice on:

1) How long things will take to happen (I imagine the next step is an interview?)
2) What's the likely outcome from this situation
3) If she loses her benefits, she'll simply not be able to afford rent or to support her kids, as her work is so inconsistent and small it's not an income... So what options are there for her?

Would appreciate any advice, and once again, please don't just post insults for what she's doing. I know very well how wrong it is, but it's all about recovery mode from now on and where she can go from here.

Thanks MSE'ers!

Firstly she's going to be repaying a fair whack of money. DWP will also inform the council so she'll be clobbered for housing benefit and council tax benefit repayments too.

HOWEVER DWP SHOULDN'T BE HER ONLY CONCERN. She needs to be extremely worried about HMRC who will go after her for income tax. Firstly, she'll be fined for not notifying them of her self employment. Secondly, if she has no records, they will calculate her income based on an average for the type of business regardless of what she has or hasn't earned and they'll arbritarily decide when she started business mand she'll be presented with a bill. There will be no way of fighting it because she has no accounts and no proof.

Her best bet is to first get on the phone to HMRC and get in there first explaining that she started a few months ago and hadn't realised that she needed to register. Also she needs to start getting on the phone to the modelling agencies and asking for duplicates and then getting on Ebay and printing out all the Ebay seller invoices and pretty much anything she can to prove what the income is. She's going to have a hard time proving expenses so she needs to accept she's going to be paying too much tax this year.

It could be a good thing looking retrospectively in a few years - it could motivate her to make more of a go of it which will ultimately leave her better off and be a good example to the kids.

matt2222

If your friend had told the DSS and Housing Benefits that she was starting an Ebay business and some modeling and still working less than 16hrs per week they would have allowed her to do this( if she was unsure of any net income) without deducting any benefits for 3/6 months and then would assess how much she had earned allowing for the £20/25 she could earn anyway and deductible allowable expenses and then make any adjustments to her benefits.
Unfortunately as she hasn't told them and has been reported their Fraud Department has to investigate.I agree with everything Benefits Bod has told you and it is very good advice
I would add though if your friend is interviewed to try and work out how much she has earned after expenses and how much she has been overpaid in benefits and not hide anything which is likely to be discovered subject to legal advice.

Benefits_Bod

Hammyman wrote: »

Firstly she's going to be repaying a fair whack of money. DWP will also inform the council so she'll be clobbered for housing benefit and council tax benefit repayments too.

If the amount of earnings leaves even 1p per week of Income Support entitlement intact, HB/CTB will be unaffected.