With around 600 people convicted of benefit fraud offences between 2021 and 2022, it is important to be aware of the potential penalties of benefit fraud. In this article, we will discuss typical benefit fraud penalties and what factors can impact sentencing.
What Is Benefit Fraud?
When someone claims benefits or government assistance to which they are not entitled, it is known as benefit fraud. This is a criminal offence and applies whether the individual:
- Provided false or inaccurate information on their application
- Faked an illness or disability
- Did not disclose their full household income or misrepresented the actual amount
- Failed to disclose a change in circumstances which could lower their benefits (such as inheriting a large amount of money)
All of these constitute a criminal offence, and perpetrators will be open to an appropriate benefit fraud punishment.
Benefit Fraud Penalties
The penalty for benefit fraud cases typically depends on the severity of the offence and how much money the defendant earned (or would have earned) from the fraud. The three types of penalty are typically a fine and/or a community order and/or a custodial sentence.
If the case does go to prosecution and you plead guilty before the Court, this may reduce your final sentence.
During a benefit fraud investigation, the office responsible for that benefit may ask you to come to an interview. This is a formal procedure and will be recorded for later use in the investigation, so it is imperative to contact a specialist fraud lawyer at this stage.
Learn more about the benefit fraud investigation process.
In some cases, where the interviewee admits they have committed an offence, a caution may be given at this stage as an alternative to pursuing prosecution. The caution does not create a criminal record but will be kept in the system for five years.
Fines are categorised in bands A-F, where A is between 25-75% of the defendant’s relevant weekly income and F is between 500-700% of that income. Fines are used as a benefit fraud punishment to serve as a deterrent to further offending and are paid in addition to returning any benefits overpayment.
DWP Administrative Penalty
A DWP administrative penalty is a type of fine that may be offered as an alternative to prosecution. The penalty is paid on top of returning the benefits overpayment, and is typically 30% of that amount. If you agree to sign a DWP administrative penalty, you will be given 28 days to change your mind.
Where the offence was not so severe as to warrant a custodial sentence, the Court may impose a community order. Requirements to meet a community order often include taking action for rehabilitation, unpaid work, a curfew, exclusion or certain activities being prohibited.
If the Court decides that there no punitive measure such as a curfew or unpaid work is necessary, a fine may be used instead (even where the offence meets the criteria for a community order).
This penalty for benefit fraud is typically avoided wherever possible. If the court is looking to impose a custodial sentence of 2 years or less, it may consider whether a suspended prison sentence is appropriate. This means that a term of imprisonment would be set out would be suspended for up to 2 years, during which the Defendant would have to complete requirements similar to those which attach to a community order. If the Defendant fails to complete such requirements to the requisite standard or commits a further offence during the period the sentence is suspended for, the likelihood is that the prison term will be activated.
When considering whether to suspend a prison sentence the court will consider the impact that a custodial sentence would have on others (such as a person the Defendant may care for), previous compliance with court orders, a realistic prospect of rehabilitation and any strong personal mitigation.
The highest custodial sentence for dishonest representation is six years and six months, while the highest sentence for conspiracy to defraud is eight years. If the proceeds of the fraud are significantly over £2 million, the penalty may exceed these guidelines.
If you commit benefit fraud, certain benefits may be stopped (although some benefits are exempt from sanctions). These are known as sanctionable benefits and include Housing Benefit, Jobseeker’s Allowance and Universal Credit. However, if you receive any ‘exception benefits’, such as statutory maternity or paternity pay or statutory sick pay, none of your benefits can be reduced or stopped.
The Sentencing Council categorises benefit fraud offences into three categories of culpability: high culpability, medium culpability and lesser culpability. These are determined by the role the defendant had in the fraud, how far it was planned and how complex the execution was.
- High culpability
In these cases, the defendant might have abused a position of power, trust or influence to involve others in their fraud. These cases will typically have a high level of planning, and where there is a group involved, the defendant may have taken a leading role.
- Medium culpability
This is often the ‘in-between’ category – it might be applied where there are factors cancelling each other out from the higher and lower culpability classes or where the defendant does not fall squarely in one of the other two categories.
- Lesser culpability
Defendants deemed to have lesser culpability may have been influenced or coerced, or have taken a smaller role in a larger fraud under direction.
Set against the Defendant’s role (culpability) will be the harm which means the amount of money which was fraudulently obtained.
By using the appropriate tables based on the offence committed which are laid out below, the likely sentence can be worked out:
Aggravating and Mitigating Factors
As cases of benefit fraud can be complex, the Court may take into account any aggravating or mitigating factors when considering a benefit fraud punishment.
Examples of Aggravating Factors
- The proceeds of fraud being used to fund a lavish or exceptional lifestyle.
- Failing to respond to any warnings given.
- Where a third party has been wronged (such as in cases of identity theft) or if the defendant attempts to place blame onto someone else.
- How long the fraud was perpetrated and how often false declarations were made.
Examples of Mitigating Factors
- Having no record of convictions or criminal activity.
- Showing remorse and cooperating with the investigation.
- Having a mental illness or learning difficulty.
- Age or lack of maturity.
- Steps taken to address any addiction or offending behaviours.
- The offence was undertaken due to exceptional circumstances or hardship.
At St Pauls, we are well-versed in the penalties for benefit fraud offences. If you or your client are under suspicion or investigation, it is important that you speak with a specialist fraud barrister without delay. Please get in touch with us today to discuss your case.