August 24, 2010 • 1:11 pm

 It seems like scarcely a day has gone by this silly season without another story revealing the millions, and in some cases billions, of pounds in benefit overpayments.

Fact-checkers such as ourselves, Channel 4’s Fact Check, and the Left Foot Forward blog have all flagged up reasons not to take some of the figures connected with these stories at face value.

So when another report appeared in this morning’s Daily Mail, concerning overpayments for Disability Living Allowance (DLA), Full Fact decided to take a closer look…

The Claim

The report appears under the headline “More than £1BILLION lost to disability benefit fraud and error – and that’s just the tip of the iceberg.”

This is clarified a little further, in the text of the report, which states: “More than £1 billion has been lost in the past six years due to fraud and error in payments of a disability benefit, according to official estimates.”

So how do the figures break down?

Analysis

When we contacted the Department for Work and Pensions (DWP) to find the relevant figures, we were directed to statistics, given nearly a month ago, in a written parliamentary answer to Labour MP, Phil Wilson.

Given that concerns have previously been raised about the lumping of fraud and error together in news reports, it is worth checking how the two add up for the DLA.

Looking at the figures for the last year, which can also be found in Table 2.1 of the DWP statistics on benefit fraud and error (published 27 May), it can be seen that while £220 million was lost in fraud and error, only £60 million of this was actually fraud.

But the Mail report does make clear that the numbers used are the combined total for fraud and error over six years. So far the report uses accurate, if hardly new, statistics.

But while the numbers themselves are correct, they only tell half the story.

Underpayments through error for 2008/9 are estimated at £290 million – £70 million more than the amount overpaid through error and fraud.

Looking back at previous years, a trend emerges, as the table below shows.

Year

Overpayments  

Underpayments  

Net

2006/7

£170 million

£230 million

+ £60 million

2007/8

£190 million

£250 million

+ £60 million

2008/9

£200 million

£260 million

+ £60 million

2009/10

£220 million

£290 million

+ £70 million

Such figures do not in any way make fraudulent claims any more permissible, they simply highlight a bigger picture, ignored by the report in the Daily Mail.

The estimated amount lost to fraud for 2009/10 was £60 million, less than a quarter of the amount not paid to people through errors leading to underpayments.

Looking at the balance of payments caused by error, it can be seen that errors caused £160 million in overpayments, but amounted to £290 million in underpayments.

Of this figure for underpayments, £280 million was customer error, when as a DWP spokesman explained, a “customer is getting less than there entitlement, either due to a mistake or omission by the customer or due to mistake or omission by a government official.

“Estimates of underpayments in the Fraud and Error report only include customers that are getting less than they are entitled to and do not include those people who are entitled to benefit, but who do not apply, or those whose applications are not awarded when they should be.”

Underpayments included in the figures account for far more money than the combined amount for people erroneously or fraudulently claiming too much.

This suggests that for the most part, errors in DLA payments work out in favour of the DWP.
 
Conclusion

While there is nothing inaccurate about the statistics quoted in the Daily Mail report, the article completely ignores the other statistics that should go hand in hand with any record of overpayments.

The large sums for both overpayments and underpayments, suggest room for improvement in efficiency when the Work and Pensions Secretary unveils his reforms to the system in the coming months.

But these figures show that if Iain Duncan Smith managed to create a system with all DLA claimants receiving the correct amount, the Government could actually stand to lose several million.

Perhaps this is what the headline meant when it announced the figures represented, “the tip of the iceberg.”

Patrick Casey 

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