Low level of IB fraud casts doubt on reforms


New official figures have revealed the low level of fraudulent claims for incapacity benefit (IB), calling into question government attempts to justify its strict new benefits regime.

The Department for Work and Pensions figures show that just one per cent of money paid to IB claimants from April 2008 to March 2009 was fraudulently claimed.

This final estimate of one per cent – or £70 million – compares with the £120 million overpaid through official errors and fraudulent claims for income support (2.9 per cent, £250 million) and jobseeker’s allowance (2.8 per cent, £80 million).

Over the last two years, the government has used supposedly high levels of IB fraud to help justify introducing a strict “work capability assessment” (WCA) for new claimants of out-of-work disability benefits.

In April 2008, former work and pensions secretary James Purnell told the Liverpool Echo: “People who scrounge from the system take money away from legitimate [IB] claimants. Clearly we want to stop that.

“We know the number of people committing fraud is down by two-thirds, but we want to do more.”

Former government welfare adviser David Freud – now a Conservative peer –told the Daily Telegraph in February 2008 that he believed fewer than a third of those claiming IB were legitimate claimants.

And in November 2007, Purnell’s predecessor, Peter Hain, vowed to “rip up sicknote Britain”.

Government figures released last month revealed only a small proportion of those applying for employment and support allowance – the new out-of-work disability benefit – are “passing” the WCA.

Neil Coyle, director of policy for Disability Alliance, said part of the reason the government introduced the new system was to tackle the supposed high level of fraud, but it had only succeeded in “escalating the nature of the problem so people believe all claimants are fraudulent”.

He said the low levels of IB fraud did not surprise him and that the government had “used perception of fraud being at a high level to instigate extremely stringent assessment for a new benefit that disabled people cannot access”.

A DWP spokeswoman insisted the government’s message was “nothing to do with the fraud side of things” and all about encouraging “inactive” people to take a more “proactive approach” to getting ready for work, rather than allowing them to “languish on benefits”.

She said the WCA tests “what you can do and not what you can’t do”, which contrasts with the personal capability assessment, the test undergone by those claiming IB.

“The whole theory behind [the new system]was to engage with people who have not engaged with the labour market for years and years.”

5 November 2009