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What can happen to people who commit benefit fraud?
Prosecution - Anyone convicted in either the Sheriff or High Courts will have a criminal record. Not all cases are referred to the courts for prosecution and less serious cases may be dealt with administratively, either by way of an Administrative Caution or an Administrative Penalty.
Administrative Caution - When a person admits to committing an offence and the loss to public funds is considered not excessive. An Administrative Caution is a written warning similar to a police caution but is held on record only by the Local Authority and the Department for Work and Pensions. If a person re-offends the Caution will be taken into account if the case is considered for prosecution.
Administrative Penalty - If an Administrative Caution cannot be be offered, another alternative to prosecution is an Administrative Penalty. This is a financial penalty, similar to a fine, and is set by legislation at 30% of any overpayment of benefit. When a person accepts an Administrative Penalty they are required to repay the overpayment and the Administrative Penalty. This penalty is also taken into account if the person re-offends.
Loss of Benefit Provisons - From 1 April 2010, the Welfare Reform Act 2009 and the Social Security (Loss of Benefit) Regulations 2010 introduced a new four week loss or reduction of benefit sanction. This is known as 'One Strike'. One Strike sanctions apply to benefit fraud offences committed on or after 1 April 2010 that result in a Caution, Administrative Penalty or first conviction.
Repeat offenders can face a loss of ongoing benefit for up to 13 weeks. For further details on the effect the Loss of Benefit Provision can have on Housing and Council Tax Benefit, please click here
Updated 06/10/11
