PIP fraud response to stop people incorrectly getting up to £749 | Personal Finance | Finance

After the Department for Work and Pensions (DWP) revealed £330 million was erroneously paid out of the PIP system due to fraud and error last year, a significant jump from £90 million the previous year as reported by the Daily Record, it has been cracking down on fraud with a range of new measures and powers soon to come into play.

In response to Conservative MP Sir John Hayes’s query about tackling this issue, DWP Minister Andrew Western shared a written statement: “The DWP has introduced measures to prevent fraud entering the system based on the types of cases and trends we have seen.”

These procedures include:

• Improving the Identity and Verification Process to stop fraudulent claims
• Implementing stricter verification for changes in customer information, like banking details
• Training sessions for Case Managers and Healthcare Professionals to underscore necessary actions when confronted with potentially fraudulent behaviour, such as fake documents

PIP offers two separate elements, each with two different rates depending on the type of disability and the level of assistance recipients need. The lowest amount people can get is £29.20 per week, while the highest sits at £749 per month.

The new Fraud, Error and Debt Bill unveiled last year, which encompasses some of these strategies, sparked growing public apprehension concerning around the protection of claimants’ bank accounts.

This concern arises from the potential collaboration between financial institutions and the DWP in investigating suspected instances of benefit fraud.

However, Western made it clear that the DWP won’t have direct access to claimant’s bank accounts or insights into their spending habits.

Instead, banks will only share “limited information” with the government to assist in verifying benefit eligibility by identifying potential breaches of eligibility rules.

The Minister went on to say: “DWP is delivering against key counter fraud activity, including investing in counter fraud professionals and building data analytical capabilities. The new Fraud, Error and Debt Bill will bring forward new measures to tackle fraud in the system.

“Details on the measures the Government will be legislating will be presented to Parliament in due course.”

The total cost of fraud and error throughout the entire welfare system hit £9.5billion last year, a slight decrease from £9.7billion in 2023/2024.

Fraud within the benefits system encompasses situations where all of the following criteria are met:

• Conditions required to receive the benefit or the specific rate are not met
• The recipient should reasonably know how these circumstances affect their entitlement
• Subsequent reviews result in stopping or reducing the benefit in question