Is there interest charged on Benefit fraud ?

nigel2smooth

I would be interested to know for someone who claimed job seekers or other other benefits say 10 years ago that they were not entitled to, would they be liable to pay interest for the money they owe over the 10 year period.

If so is this a high amount of interest. For example, if the person frauduently claimed £10,000 would this mean after interest that this would accumulate to say £30,000 after the 10 years.

HappyMJ

There is no interest charged.

nigel2smooth

Do you know why this is, just wondering because in my example the 10,000 becomes worth less as time goes on. Should there not be some interest charged.

tottybum

No there is no interest charge and you can be rest assured that the claimant has claimed hardship when paying it back under the old rules which means a deduction of £5 a week off their current benefits until such time as the £10,000 is paid back!

I am aware of cases where after 25 years the debt has still not been settled and deductions are now being taken at the £5 rate from their old age pension!!

No incentive whatsoever to clear the debt any quicker.

nigel2smooth

tottybum wrote: »

No there is no interest charge and you can be rest assured that the claimant has claimed hardship when paying it back under the old rules which means a deduction of £5 a week off their current benefits until such time as the £10,000 is paid back!

I am aware of cases where after 25 years the debt has still not been settled and deductions are now being taken at the £5 rate from their old age pension!!

No incentive whatsoever to clear the debt any quicker.

Thanks for comment,

However, what if say the claimant is now working and not on benefits. Would this mean they would have to pay interest, if it was after say 10 years since he fraudulantly claimed.

rogerblack

No, in no case is there interest.
And I'd say this is generally a good thing, given the DWPs current handling of debt.

For example, they may in the case of an overpayment occurring, throw away the papers after the appeal window expires,so in the case of a claimant who was wrongly judged to have an overpayment, and does not seek advice at the time due to assuming it's correct - there is no way to prove they are right.

They should have to keep all of the evidence used to make the decision until the debt is paid off.

tottybum

nigel2smooth wrote: »

Thanks for comment,

However, what if say the claimant is now working and not on benefits. Would this mean they would have to pay interest, if it was after say 10 years since he fraudulantly claimed.

No, no interest is charged.

And if he was savy he would still be applying for hardship.

bigbill

They can add a penalty at 30% of the amount overpaid

nigel2smooth

Anyone know is there a time period where someone can be made pay back the money they claimed by frauding. For example, if like 20 years past could they still be made pay back money.

It seems odd that no interest is charged cos if someone was not required to pay back the money say untill after 20 years since they claimed by fraud the amount they are paying back is less in value.

HappyMJ

nigel2smooth wrote: »

Anyone know is there a time period where someone can be made pay back the money they claimed by frauding. For example, if like 20 years past could they still be made pay back money.

It seems odd that no interest is charged cos if someone was not required to pay back the money say untill after 20 years since they claimed by fraud the amount they are paying back is less in value.

If they have been found guilty in a court then it's forever. If they have not yet been found guilty then the DWP/HMRC/Council whoever...has 6 years to bring a case to court. If they don't bring a case in that time then there is no debt.

rocketman48_2

I have been reading about this all day I think if they can prove benefit fraud they can impose a 30% admin charge and offer that as a penalty instead of proceeding to prosecution

Normally this is only offered in cases of fraud >£2000.....