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Prosecuting Welfare and Health Fraud Cases

Guiudance reviewed September 2019|Legal Guidance, Fraud and economic crime

This guidance: 

  1. provides an overview of welfare and health fraud case-law and procedures.
  2. provides guidance for prosecutors when reviewing  welfare and health fraud cases. 

Separate guidance applies to DEFRA and MHRA cases. 

Owing to the specialist nature of the cases concerned and in order to maintain consistency, all case decisions will be made by a reviewing prosecutor. Advocates at court are asked to provide advocacy services only and to refer all casework decisions back to the reviewing prosecutor. 

The respective roles of CPS, DWP and DH investigators are set out in Memoranda of Understanding between the CPS and each respective Department. 

Should advocates wish to raise queries on cases, every file contains the contact details of the reviewing prosecutor. 

Mandatory Case Handling Instructions 

The decision to prosecute and charge is made by a CPS prosecutor in all welfare and health fraud cases. 

All decisions to amend, withdraw or substitute charges or to accept a guilty plea on a basis different to that alleged in the summary of facts on the prosecution file must be referred to and made by the reviewing prosecutor. 

Where applicable, instructions as to acceptance of pleas will be on the prosecution file. Any other offers of plea must be referred to the reviewing prosecutor. 

Advocates must not agree to a disposal by way of simple caution or other out of court disposal unless requested or authorised to do so by the reviewing prosecutor, who can only do so with approval. See Diversion from Prosecution below. 

If it is necessary to seek instructions during court proceedings this should be done by telephone or email. Advocates are advised to put the case back in the list to enable a discussion to take place. The appropriate telephone contact number or secure email address will be on the prosecution file. 

It is expected that files for court will be available for advocates one week before the court date. Full instructions for advocates will be on every file, including specific instructions on confiscation, where appropriate.  

Benefit Fraud 

The CPS took on the prosecution of DWP criminal investigations in 2012, and until the restructure of fraud work in July 2018, these cases were handled exclusively by the Specialist Fraud Division (SFD). Since the restructure, only DWP cases meeting the SFD referral criteria continue to be prosecuted in SFD, with the others handled by the specialist fraud centres in CPS Wessex, Mersey-Cheshire and Wales. 

Section 128 of the Welfare Reform Act 2012 (WRA) permits the Secretary of State for Work and Pensions and persons providing services to the Secretary of State to disclose social security information to the Director for Public Prosecutions (DPP) for the purpose of the functions exercised by the DPP. 

Section 129 of the WRA 2012 prescribes the use that can be made of social security (including tax credit) information disclosed by the Secretary of State under Section 128 and creates an offence of unlawful disclosure. CPS prosecutors disclosing social security information in accordance with the DPP’s functions and CPS policies will incur no liability. 

Information given to the court is reportable in the usual way. 

Department for Work and Pensions Fraud and Error Service (FES) / Local Authority (LA), HMRC and Single Fraud Investigation Service (SFIS) Investigations 

The detection, prevention and punishment of benefit fraud is central to Government policy in tackling welfare payment fraud. 

DWP’s Fraud and Error Service (FES) investigates all benefit offences – which include tax credit offences since 06/06/2012. Tax credit offences may also be investigated jointly by DWP and HMRC. FES also operates in Scotland and those cases are referred to the Crown Office and Procurator Fiscal Service (COPFS) in respect of all criminal investigations. The COPFS also make independent charging decisions referred to them in accordance with the COPFS Code. 

Local Authority (LA) investigators investigate offences connected with Housing Benefit , Council Tax Benefit, the Council Tax Reduction Scheme and some DWP benefits but cannot investigate tax credit offences unless authorised to do so by the Secretary of State under Section 109A of the Social Security Administration Act 1992 (SSAA). 

The Secretary of State will only authorise Local Authority investigators to investigate the full range of benefits and tax credits under Section 109A of the SSAA 1992 if the LA is participating as a service provider to the Secretary of State, under the auspices of an MOU with the DWP, in a pilot of Single Fraud Investigation Service (SFIS). If a case received directly from a local authority under an SLA contains tax credit information, prosecutors should satisfy themselves that the tax credit information on file was obtained using one of the following Gateways. 

HMRC officers can investigate tax credit offences under Section 19 of the Tax Credits Act 2002 and, if authorised by the Secretary of State under Section 109A of the SSAA, can also investigate offences connected with DWP and LA administered benefits as service provider to the Secretary of State in a Single Fraud Investigation Service pilot under the auspices of an MOU between the DWP and HMRC. Tax credit cases sent to the CPS will either be investigated jointly by HMRC and DWP or investigated under the Single Fraud Investigation Service pilots. 

In Single Fraud Investigation Service (SFIS) pilots, DWP, HMRC and LA fraud investigators investigate (either solely or jointly), on behalf of the Secretary of State, offences connected with all benefits set out in Part VI Social Security Administration Act 1992, including tax credits. Under the pilot scheme, LA and HMRC investigators in SFIS are authorised by the Secretary of State under Section 109A of the SSAA 1992. 

SFIS Pilot files will be clearly marked as such. 

All these cases can be prosecuted by all CPS prosecutors. See CPS Powers to prosecute below. 

Prosecutors who need more detailed information on these points are asked to contact the policy leads.

There is a dual purpose to a benefit fraud investigation: 

  • to enable the DWP/LA/HMRC to determine whether benefit/tax credit should have been payable in the particular case; and 
  • to ascertain whether a criminal offence connected with a claim to benefit /tax credit has been committed. 

Social security legislation requires benefit claimants to, (a) furnish information and evidence pursuant to a request from the DWP/LA, and (b) to notify the DWP/LA of any change of circumstance which the claimant knew would affect the right to benefit. Separate tax credit legislation prescribes the information claimants are required to report. 

The investigation should establish whether and how the claimant failed to do these things. 

Disposals Available to DWP FES Investigators 

Once a DWP FES investigation is complete and DWP FES investigators have identified a potential offence, they have discretion whether to: 

  • Apply an Administrative Penalty under Section 115A or Section 115B of the Social Security Administration Act 1992. See Diversion from Prosecution. 
  • For offences committed wholly before 01/04/2012 offer an administrative caution. See Diversion from Prosecution. 
  • Refer the case to the CPS for a decision whether to prosecute. 

The DWP enforcement (penalty) policy applies in all DWP FES, joint DWP/HMRC/LA investigations where DWP leads the investigation and to all SFIS investigations. 

Disposals Available to Local Authority Investigators 

Once a Local Authority (LA) benefit fraud investigation is complete and LA investigators have identified a potential offence, LA fraud investigators have discretion whether to: 

  • Apply an administrative penalty under Section 115A or Section 115B of the SSAA 1992. See Diversion from Prosecution below. 
  • For offences connected with Housing Benefit and Council Tax Benefit, offer a simple caution. See Diversion from Prosecution below. 
  • Refer the case to the CPS or to LA prosecutors for a decision whether to prosecute. 

LA investigators follow the LA’s local enforcement policies. Many LAs follow the DWP’s enforcement (penalty) policy but they are not bound by it. LA officers acting as service providers for the Secretary of State and authorised under Section109A of the SSAA 1992 in SFIS pilots apply the DWP enforcement (Penalty) policy. 

If any queries arise as to a LA enforcement policy, prosecutors are asked to contact the policy lead.  

Disposals Available for Offences Connected with Tax Credit 

The DWP’s enforcement policy for tax credit offences broadly follows the DWP’s enforcement (penalty) policy with the exception of administrative penalties. Neither Section 115A nor Section 115B of the SSAA1992 apply to tax credits. If a case is not referred to the CPS, DWP have discretion to refer a tax credit case to HMRC for HMRC’s own civil penalty policy to be applied. 

Referral to the CPS to Consider Prosecution of Offences Connected with Benefits or Tax Credits 

Referral to the CPS to consider prosecution is reserved for the more serious cases. CPS prosecutors take appropriate account of DWP enforcement policy when applying the Public Interest Test. 

The kinds of circumstances where a case may be referred to the CPS following a criminal investigation by DWP (FES and SFIS) and HMRC jointly, and those Local Authorities following the DWP penalty policy include those where: 

  • The recoverable overpayment as decided by the decision maker (including Housing Benefit and Council Tax Benefit and tax credits) is £5,000 or more; 
  • False identities or other personal details have been used; 
  • False or forged documents have been used; 
  • Official documents have been altered or falsified; 
  • The person concerned occupied a position of trust; 
  • The person concerned assisted or encouraged others to commit offences; 
  • There is evidence of premeditation or organised fraud; 
  • The person concerned has previously been convicted of benefit fraud or received a penalty for benefit fraud; 
     
  •  The offer of an administrative penalty or caution is not accepted.

This list is not exhaustive. Complete discretion to refer any case to independent prosecutors is reserved. 

In exceptional cases where the prosecutor decides that a caution is suitable, DWP may administer an administrative caution. This can be an appropriate disposal where the criteria set out in the Ministry of Justice guidance on simple cautions for adult offenders are met. If the individual is subsequently prosecuted for another benefit offence, the administrative caution may be cited in court. 

Loss of Benefit Provisions 

The DWP can, following a conviction for an offence connected with social security benefits or following an imposition of an administrative penalty for such offence, disallow or reduce the defendant/suspect’s benefit for a prescribed period under the Social Security Loss of Benefit Regulations. See Loss of Benefit following Conviction.

Advocates will need to be aware of these provisions in order to assist the sentencing court. 

DWP FES, HMRC and Local Authority Investigator Powers 

Powers to detain, arrest, search and seize and to interview 

DWP FES, HMRC tax credit and LA (whether independently or as part of SFIS) investigators do not have powers of detention, arrest, search or seizure and rely on police assistance when any of these functions are required. 

DWP FES, HMRC tax credit and LA fraud investigators apply Code C of PACE when conducting interviews under caution. Suspects attending interviews under caution (IUC) do so voluntarily; they are not detained nor are they under arrest. These interviews under caution are usually conducted at a local benefit office. Free legal advice is not available where the interview is not conducted in the presence of a police constable. (The Police and Criminal Evidence Act 1984 (Codes of Practice) (Revision of Codes C, G and H) Order 2012). Suspects are informed at the beginning of the interview under caution that they have the right to seek legal advice and the interview may be suspended to enable them to do so. HMRC officers acting jointly with FES or participating in SFIS pilots will not be authorised in accordance with Section 19 of the Police and Criminal Evidence Act 1984 (Application to Revenue and Customs) Order 2007 and they will not be able to exercise powers and functions set out in Schedule 1 of that Order. 

Powers to seek information 

DWP FES authorised officers have powers under Section 109A and Section 109B of the Social Security Administration Act 1992 (SSAA) to request information for the purpose of investigating offences connected with all social security payments (including tax credits). 

LA officers authorised under Section 110A of the SSAA have powers to request information for the purpose of investigating offences connected with benefits under Part VI SSAA - Housing Benefit, Council Tax Benefit, Income Support, Jobseekers Allowance, Incapacity Benefit, State Pension Credit and Employment Support Allowance; the list excludes tax credit offences and a number of other DWP administered benefits. 

HMRC officers are also authorised under Section 122 of the Welfare Reform Act 2012 to exercise information seeking powers under Section 109A and Section 109B of the SSAA. 

HMRC and LA officers participating in the SFIS pilot and authorised by the Secretary of State under Section 109A of the SSAA can seek information for the purpose of investigating all social security offences (including tax credits). Some limitations apply to HMRC and LA officers investigating such offences as regards administering administrative penalties and obtaining RIPA authorisations – these are outlined below.   

A refusal to comply with a request for information under these provisions is a criminal offence under Section 111 of the SSAA – see offences below. 

Enforcement powers 

FES investigators, LA and HMRC tax credit investigators, have the power to apply the applicable enforcement (penalty) policy. 

Surveillance powers 

The Regulation of Investigatory Powers Act (RIPA) 2000 enables DWP and LAs to authorise directed surveillance (but not intrusive surveillance) where necessary and proportionate for the purposes of preventing or detecting crime. Surveillance is commonly used to ascertain whether a partner is “living with” the claimant. Directed Surveillance is undertaken by DWP and HMRC tax credit investigators, pursuant to Section 28 of the RIPA 2000.  

Where DWP, HMRC and LA investigators are carrying out a joint investigation / operation involving directed surveillance, only one authorisation by the lead organisation under the Regulation of Investigatory Powers Act 2000 (RIPA) is obtained. The Surveillance Commissioner has confirmed that this continues to apply after November 2012 when Section 38 of the Protection of Freedoms Act 2012 came into force. 

Section 38 of the Protection of Freedoms Act inserts Section 32A into the RIPA 2000, so that any authorisation for surveillance made under Section 28 or 29 of RIPA does not take effect until the relevant judicial authority (a magistrate in the case of England and Wales) has made an order approving the grant of authorisation. Such authorisation is only available to a local authority investigating “serious or serial benefit fraud”. Local authorities cannot authorise directed surveillance unless this involves a criminal offence(s) punishable (whether on summary conviction or indictment) by a maximum term of at least 6 months' imprisonment. The ultimate choice of charge remains with the prosecutor, not the investigator. Investigators are required to keep under review the level of crime they are investigating. The charging standard will assist. Below is a link to the Home Office guidance for local authority investigators. Prosecutors will need to bear in mind the potential for challenge if a Section 112 offence is used. 

Where the LA officer is acting as part of a joint investigation, with DWP leading that investigation a judicial authority would not appear necessary. Where, however, the LA conducts or leads the investigation (even if the investigation is in respect of DWP benefits and even if it is conducted on behalf of the Secretary of State as service provider by Section 109A of the SSAA 1992), any authorisation for directed surveillance has to be approved by order of the judicial authority under Section 32A of the RIPA 2000. 

Drive-bys 

‘Drive-by’ is the term used to describe an investigator driving past an address or premises. There is no requirement to have a Directed Surveillance Authorisation (DSA) in place in support of a drive-by where the intention is to affirm the existence of premises and/or to affirm or re-affirm the existence of a vehicle at a particular premises. However, the objective for conducting a drive-by might be achieved on the first occasion and therefore anything sought in addition may require a DSA. 

Without a DSA in place the investigator must guard against excessive or repeat drive-bys even where the initial activity fails to provide the information sought. 

Drive-bys are not to be used to try and monitor the movement of people to or from premises. 

If the drive-by requires an investigator or vehicle to enter onto private land then it is no longer a simple drive-by and takes the activity into trespass for which a separate authority would be required. 

If the drive-by is carried out in a covert manner (i.e. the person whose premises/address is being driven past does not know that the investigating agency are looking at those premises, it is being done for the purposes of a specific investigation or operation and it is not an immediate response to events) then the test is whether private information about a person may be obtained as a result of the drive-by of the premises. If the answer to this question is, “Yes”, then a DSA should be sought. For the purposes of a drive-by, car registration details are not considered as private information. 

Charging / bail powers 

FES, HMRC and LA investigators cannot charge or bail suspects. Unless the police are involved in the criminal investigation, proceedings are instituted by postal charge and requisition by the CPS following a prosecutor’s decision to prosecute or a decision to charge by CPSD, in certain cases. 

Decisions on Overpayment and the Repayment of Overpayments of Benefit 

Once the evidence gathering is complete, the case is referred to the DWP’s, LA’s or HMRC’s Decision Makers for a decision on: 

  • whether the claimant was entitled to the benefit claimed; and 
  • a further decision on the amount of benefit that is recoverable. 

The “overpayment decision” is a civil process made on the balance of probabilities based on the information obtained during the investigation. The overpayment decision procedure is conducted by officials who apply Social Security and Tax Credit Regulations. 

The overpayment decision procedure is entirely separate from the criminal investigation. 

The claimant is informed of the decision by an overpayment notification letter (sometimes referred to in the prosecution file as an Org7/ DlOrg7/LT54). Advocates need to be aware that a criminal charge will reflect the extent of offending that can be proven to the criminal standard. This may be different to the overpayment that can be proven to the civil standard. The amount alleged to have been defrauded and the period of alleged fraud may be different to the calculated overpayment for this reason. 

In any event:  

  • The claimant is required to repay the full amount of the overpayment irrespective of how the criminal case has been concluded (e.g. the defendant will have to repay the entire overpayment even if the prosecutor accepts a basis of plea on quantum). 
  • Paying back the overpaid benefit will not lead to a prosecution being withdrawn.  

The claimant has a right of appeal against the benefit decision. 

DWP Benefit Appeal or Prosecution – Which Comes First? 

Where the CPS is informed before the charges are laid that the claimant has made an appeal to the First-tier Appeal Tribunal against the overpayment decision, the case MAY be returned to the investigator to await the outcome of the appeal. The prosecutor retains discretion to prosecute the case notwithstanding the fact that there is an outstanding appeal. 

Where an appeal is lodged after the commencement of criminal proceedings, the decision on how to proceed will be made by the reviewing lawyer. 

In exercising this discretion the reviewing lawyer will consider: 

  • Whether to ask the criminal court to consider adjourning the case until the appeal is concluded. 
  • The key cases of Mote v Secretary of State for Work and Pensions [2007] EWCA Civ 1324 and R v Wearing [2011] All ER(D) 124 are authorities for the position that both proceedings can run in tandem, provided the continuation of civil proceedings does not give rise to a real risk of prejudice to the defendant in the criminal proceedings. A risk of prejudice could be expected to weigh heavily in favour of an adjournment pending the conclusion of the criminal proceedings, but would not necessarily be decisive. Should the civil proceedings conclude prior to the criminal proceedings, the former would not bind the latter. 

The Prosecution Process 

Postal Charge and Requisition (PCR) 

Unless there is police involvement (e.g. police arrest) cases are commenced by postal charge and requisition (PCR). 

The Criminal Justice Act 2003 (Commencement No. 27) Order 2012/825 empowers the DPP to issue PCRs, pursuant to Section 29 of the Criminal Justice Act 2003. 

The rules of service apply in the same way as for summonses and a signed certificate of service appears on the PCR document held on the prosecution file. 

The PCR replaces information and summons. The PCR is sent to the defendant by post together with the Initial Details of the Prosecution Case. 

A copy of the Initial Details of the Prosecution Case sent to the defendant will be on the advocate’s file. Depending on the nature of the case, the Initial Details of the Prosecution Case will include a summary of facts and key witness and exhibit evidence. 

A copy of the PCR will be sent to the court by e-mail. 

The prosecution file at court – first hearing for DWP/Local Authority cases 

For the first hearing in the Magistrates’ Court, the CPS advocate will be provided with a standard prosecution file which should contain the following material: 

  • MG3 and or MG3A;
  • MG5 (or a detailed case summary);
  • Requisition and written charges;
  • Investigators’ statements;
  • Any other witness statements;
  • Exhibits;
  • A transcript of the Interview(s) Under Caution ;
  • Confirmation of service of the Initial Details of the Prosecution Case;
  • Antecedents;
  • MG9 (witness list) and MG10 (witness availability);
  • MG12 (exhibit list)
  • MG19 (details of any compensation/costs order sought);
  • Details of any confiscation order sought and, if applicable, instructions to commit under Section 70 of the POCA;
  • A Section 116 of the SSAA Certificate, if required (see references to limitation periods for summary only offences in DWP and Local Authority cases detailed below);
  • A competed Preparation for Effective Trial (PET) Management Form in not guilty anticipated plea (NGAP) cases;
  • Either, a Streamline Disclosure Certificate 1 (if the case is a guilty anticipated plea (GAP)), an SDC2 (if the case is NGAP but there is no unused material to disclose) or an SDC3 (if the case is NGAP but there is unused material to disclose);
  • Contact details for the reviewing prosecutor.   

Cases will be dealt with in accordance with the guidance issued in The Director’s Guidance on the preparation of Crown Court Case work and Aide memoire on the management of Either Way Offences.  

Offences in Benefit Fraud and Tax Credit Cases 

The most common frauds occur as a result of: 

1) A failure to declare true financial circumstances 

e.g. employment (paid or unpaid, employed or self-employed work), household income, capital (including savings, properties owned, investments etc), student status (including loans and / or grants), outgoings over declared (including rent, childcare and/or nursery care) etc. 

2) Failure to declare true social, personal or family circumstances 

e.g. living with a partner as husband and wife, children leaving the family home, dependants dying etc. 

3) Disability related fraud 

e.g. unreported improvement in mobility or reduced care needs (Disability Living Allowance or Personal Independence Payment cases), unreported improved capacity to work (Incapacity Benefit and Employment and Support Allowance cases) etc. 

4) Identity or organised fraud 

e.g. applying for national insurance numbers, benefits, payments or other financial advantage, using a false or hijacked identity and / or false identity documents in support, forgery and counterfeiting, or an organised attack or manipulation of the welfare payment system such as a cyberattack, internal or contract fraud. 

Charging Standard on Benefit Fraud and Tax Credit Fraud Cases 

General Principles: Charging Standard 

This Standard is designed to assist prosecutors in selecting the most appropriate charge, in the light of the facts that can be proved at court, at the earliest possible opportunity where benefit or tax credit fraud is alleged. 

The standard set out below:  

  • Should not be used in the final determination of any investigatory decision, such as any decision to arrest; 
  • Does not override any guidance issued on the use of appropriate alternative forms of disposal short of charge, such as cautioning or other disposals available in benefit fraud investigations; 
  • Does not override the need for consideration to be given in every case as to whether a charge / prosecution is in the public interest;  
  • Does not override the need for each case to be considered on its individual merits nor fetter the discretion to charge and to prosecute the most appropriate offence depending on the particular facts of the case. 

Background 

The previous position, when prosecution policy was the responsibility of the DWP, was to use Section 112 of the Social Security Administration Act 1992 (summary only) offences in cases where the loss to the Department was less than £20,000. Investigators no longer approach investigations with that expectation. No financial threshold for the expectation or the choice of charges is applied by investigators or by prosecutors. The CPS approach in this Charging Standard brings the prosecution of benefit fraud into line with the prosecution of fraud generally where either way offences are the norm. 

The Code for Crown Prosecutors (October 2018) 

In accordance with paragraph 6.1 of the Code, prosecutors will select charges which: 

  • reflect the seriousness and extent of the offending; 
  • give the court adequate powers to sentence and impose appropriate post-conviction orders; 
  • allow a confiscation order to be made in appropriate cases, where a defendant has benefitted from criminal conduct; and 
  • enable the case to be presented in a clear and simple way. 

This means that prosecutors may not always choose or continue with the most serious charge where there is a choice and the interests of justice are met by selecting the lesser charge. 

Prosecutors should never proceed with more charges than are necessary just to encourage a defendant to plead guilty to a few. In the same way, they should never proceed with a more serious charge just to encourage a defendant to plead guilty to a less serious one. 

Public interest factors 

When considering the public interest questions under the Code, it should be borne in mind that benefit and tax credit fraud has an impact on communities and taxpayers by reducing the amount of public monies available.  

Selection of charges 

Most benefit frauds are either committed by: 

  • the provision of false information at the beginning or during a claim – a commission offence; or 
  • during the course of the claim by failing to notify a change of circumstances which affects entitlement to benefit – an omission offence. 

When considering the various offences available, it will be a matter of fact in each case, as to whether dishonesty can be proved to the required standard. 

Dishonesty was demonstrated by applying the two-stage test in Ghosh [1982]1QB 1053: firstly, whether the conduct complained of was dishonest by the lay objective standards of ordinary reasonable and honest people; and, if the answer was yes, secondly, whether the defendant must have realised that ordinary honest people would so regard the behaviour. Lord Lane C.J went on to say, “If a person knows that he is not telling the truth he is guilty of dishonesty”. 

However, in Ivey v Genting Casinos UK Ltd (t/a Crockfords) [2017] UKSC 67, the test in Ghost was reconsidered by the Supreme Court, which held that the second limb ought no longer to apply. At paragraph 74 of the Judgement, Lord Hughes JJSC stated that the second limb of the Ghosh test did not correctly represent the law and that directions based upon it ought no longer to be given. The test of dishonesty was as set out by Lord Nicholls in Royal Brunei Airlines Sdn Bhd v Tan [1995] 2 AC 378 and by Lord Hoffman in Barlow Clowes International Ltd v Eurotrust International Ltd [2006] 1 WLR 1476. When dishonesty is in question the fact-finding tribunal must first ascertain (subjectively) the actual state of the individual's knowledge or belief as to the facts. The reasonableness or otherwise of his belief is a matter of evidence (often in practice determinative) going to whether he held the belief, but it is not an additional requirement that his belief must be reasonable; the question is whether it is genuinely held. When once his actual state of mind as to knowledge or belief as to facts is established, the question whether his conduct was honest or dishonest is to be determined by the fact-finder by applying the (objective) standards of ordinary decent people. There is no requirement that the defendant must appreciate that what he has done is, by those standards, dishonest. 

The most commonly used either way offences are those under Section 111A of the Social Security Administration Act 1992 (SSAA) or the Fraud Act 2006 (which can be used in most cases including where the alleged fraud has been detected before any benefit payments have been made). Prosecutors will also wish to consider other possible offences including those under the Theft Acts 1968 and 1978 (particularly in historic pre-Fraud Act cases), False Accounting, offences under the Forgery and Counterfeiting Act 1981, money laundering and conspiracy to defraud or to cheat the Revenue – details of specific alternative offences are set out in this chapter. 

Where the defendant has provided false information or made false declarations or representations in a claim for benefit, it is likely that the majority of prosecutions will be brought under: 

  • Section 111A(1)(a) of the Social Security Administration Act 1992 (SSAA) - dishonestly making a false representation with a view to obtaining a benefit; 
  • Section 111A(1)(b) of the Social Security Administration Act 1992(SSAA) – dishonestly producing or furnishing, or causing or allowing to be produced or furnished, any document or information which is false in a material particular with a view to obtaining a benefit; or 
  • Sections 1(2)(a) and 2 of the Fraud Act 2006 – dishonestly making a false representation and intending by making the representation to either make a gain for himself or another, or to cause loss to another or to expose another to a risk of loss. 

The benefit referred to in Section 111A(1)(a) and Section 111A(1)(b) above can be for the defendant or for some other person. 

Where the defendant has made an initial legitimate claim for benefit but then fails to report a change of circumstances which affects his entitlement, and the defendant knew that the change affected her entitlement, it is likely that the majority of prosecutions will be brought under: 

  • Section 111A(1A) of the Social Security Administration Act 1992 (SSAA) – dishonestly failing to give prompt notification of a change in circumstances affecting entitlement to benefit; or 
  • Sections 1(2)(b) and 3 of the Fraud Act 2006 – being under a legal duty to disclose information but dishonestly failing to do so, intending by that failure to make a gain (nb the legal duty arises under the Social Security (Claims and Payments) Regulations 1987 / 1968).

Where tax credit fraud is alleged, the majority of prosecutions will be brought under: 

  • Section 35 of the Tax Credits Act 2002 (if the offences takes place before 01/02/2019) – being knowingly concerned in fraudulent activity undertaken with a view to obtaining payments of tax credits; or 
  • The Fraud Act 2006 (if the offence takes place on or after 01/02/2019). 

Prosecutors should note that the Welfare Reform Act 2012 (Commencement No 32 and Savings and Transitional Provisions) Order 2019 effectively abolishes Child and Working Tax Credits (replaced with Universal Credit) with effect from 01/02/2019. The Order also repeals Part 1 of the Tax Credits Act 2002, which contains the offence under Section 35, from that date. Whilst the change in provisions allows for the payment of Tax Credits to specific claimants beyond 01/02/2019, with Section 35 of the Tax Credits 2002 to have continuing effect in those instances, prosecutors ought to instead consider prosecuting under the Fraud Act 2006 in all Tax Credit cases where the offence period spans 1 February 2019.  This will serve to eliminate any issues brought about by the transitional arrangements. The Fraud Act 2006 covers both fraudulent representations and failing to disclose information where there is a legal duty to do so. This does not preclude the consideration of other offences, such as the common law offence of cheating the public revenue, although the statutory Fraud Act 2006 offence ought to be the starting point for consideration.  

The points to prove section in the Legal Guidance on prosecuting benefit and tax credit fraud offences set out the constituent elements of the most commonly used Social Security offences and cite the governing case law. The points to prove section in the Legal Guidance on Fraud set out the points to prove for Fraud Act 2006 offences. Both Section 111A of the SSAA 1992 and the Fraud Act 2006 require the prosecution to prove that the defendant acted dishonestly. The test for dishonesty is detailed above. 

Section 111A of the SSAA 1992 (either way) offence or Fraud Act 2006 offence? 

SSAA 1992 contains bespoke either way benefit fraud offences with an established body of case law. In most cases of benefit fraud, it will be usual to charge under Section 111A of the SSAA 1992 unless the facts of the case suggest that an alternative charge under the Fraud Act 2006 or other provision under the general criminal law is more appropriate. 

Where Section 111A of the SSAA 1992 cannot be charged  

In some cases, the fraud cannot be charged under Section 111A of the SSAA 1992 because the payments made do not fall within the Section 121DA of the SSAA 1992 definition of “payments made under relevant social security legislation”, for example, Access to Work cases. 

Similarly, tax credits are not social security payments; tax credit fraud will usually be charged under Section 35 of the Tax Credits Act 2002 or the Fraud Act 2006. 

Difference in maximum sentence 

The maximum sentence available for Fraud Act offences tried on indictment is 10 years’ imprisonment. The maximum sentence for bespoke benefit fraud offences under Section 111A of the SSAA 1992 is 7 years’ imprisonment. Where the sentence is likely to exceed 7 years, it may be more appropriate to charge a Fraud Act 2006 offence. Separate sentencing guidelines apply to SSAA 1992 and Fraud Act 2006 offences and prosecutors may wish to draw the court’s attention to that difference. Prosecutors may also need to be prepared to explain why Fraud Act offences have been selected over SSAA 1992 offences.  

Additional criminal offences to consider include: 

  • Section 15(A) of the Theft Act 1968 – obtaining money transfers by deception (for offences committed before or partly before 15/01/2007); 
  • Section 24A of the Theft Act 1968 – dishonestly retaining a wrongful credit; or 
  • Section 17(1) of the Theft Act 1968 – False Accounting. 

Whilst it remains possible to charge a false accounting offence after the introduction of SSAA 1992 and the Fraud Act 2006, it will generally be more appropriate to charge Section 111A of the SSAA or sections 1(2)(a) and 2 of the Fraud Act 2006 for dishonest false representations. 

Where a forged document is presented in support of a claim for benefit or in support of an application for a National Insurance Number: 

  • Section 4 and Section 6 of the Identity Documents Act 2010 – possession of false identity documents with improper intention and possession of false identity documents without reasonable excuse; and 

Prosecutors should refer to the Legal Guidance chapter on Forgery and Counterfeiting for further details on the above offences. 

In cases of organised fraud: 

  • Conspiracy to defraud contrary to common law; 
  • Statutory conspiracy contrary to Criminal Law Act 1977. Wherever possible, statutory conspiracy should generally be preferred to common law conspiracy; 
  • Cheating the Public Revenue contrary to common law, however, a substantive offence or statutory conspiracy would usually be preferable where possible. 

Section 112 of the Social Security Administration Act 1992 offences 

If dishonesty cannot be proved, prosecutors should go on to consider whether there is sufficient evidence to prosecute using the Section 112 of the SSAA 1992 summary only offence, where the standard to be applied is that the defendant acted “knowingly”. 

“Knowledge” 

 

Knowledge is actual knowledge, which can be inferred from the defendant’s actions or words. Wilful blindness, i.e. the defendant was shutting their eyes to an obvious knowledge or deliberately refraining from making inquiries or suspected the truth but did not want it confirmed can sometimes be used to impute actual knowledge (Westminster City Council v Croyalgrange Ltd [1986] 1 W.L.R. 674), however, such a proposition must be treated with caution, as the alternative view is that this is a matter of evidence, and that nothing short of actual knowledge will suffice (see Archbold Criminal Pleading Evidence and Practice 2019 Ed, paragraph 17-46). 

Knowledge does not, however, include constructive knowledge, i.e. the defendant ought to have known or neglected to make inquiries as a reasonable and prudent person would. In Flintshire CC v Reynolds [2006] EWCH 195 (Admin) it was alleged that Mrs Reynolds had knowingly produced information she knew to be false in a material particular for the purpose of obtaining a benefit or other payment or advantage. Mrs Reynolds’ evidence was that she signed the form completed by her husband without reading it. It was held that constructive knowledge is not enough to demonstrate that something has been done knowingly in the context of a criminal statute. 

Section 111 of the SSAA 1992 is also a summary only offence sometimes used where a person, required to provide information under Section 109A of the SSAA 1992, refuses to do so following a request for information by an Authorised Officer. 

Acceptance of Pleas 

Prosecutors should have regard to the Attorney General’s Guidelines on the Acceptance of Pleas and the Prosecutor’s Role in Sentencing Exercise, the Code for Crown Prosecutors, R v Cairns and others [2013] EWCA Crim 467 and should only accept the defendant’s plea if: 

  • the court is able to pass a sentence that matches the seriousness of the offending, particularly where there are aggravating features; 
  • it enables the court to make a confiscation order in appropriate cases, where a defendant has benefitted from criminal conduct; and 
  • it provides the court with adequate powers to impose other ancillary orders, bearing in mind that these can be made with some offences but not with others. 

Where a charge under Section 111A of the SSAA has been preferred, the acceptance of a plea of guilty to a lesser count under Section 112 of the SSAA will rarely be justified in the absence of a change in circumstances that could not have been foreseen at the time of charge. Such instances are expected to be confined to cases where, upon continuing review, the prosecutor no longer considers that dishonesty can be proven but is satisfied that knowledge can. 

Prosecutors should also note R. v Scunthorpe Justices Ex p. M [1998] 2 WLUK 513, authority for the proposition that the purpose of the time limit for trial of summary offences is to ensure that such offences are charged and tried as quickly as reasonably practicable following their alleged commission. However, information could be amended, even to allege a different offence, more than six months after it was laid, provided that the new offence arose from the same misdoing as the offence initially charged and the amendment was in the interests of justice. The proper test to be applied, therefore, was whether both offences arose from the same or substantially the same facts, and if so, whether the amendment was in the interests of justice, having particular regard to the defendant's interests and also to the purpose of the time limit. 

However, in accordance with Section 116(2) of the SSAA 1992, proceedings for a summary only offence under the Act must be commenced within 3 months from the date on which evidence, sufficient in the opinion of the Secretary of State to justify a prosecution for the offence comes to his knowledge, or within 12 months from the commission of the offence, whichever is the later. Prosecutors may only accept a plea to a Section 112 offence in place of a Section 111A offence originally charged, if the Section 112 offence would have been within the statutory limitation period had it been charged in the first instance.  

Review is a continuing process and prosecutors must take account of any change in circumstances that occurs as the case develops. If, subsequent to any review, the prosecutor no longer considers that dishonesty can be proven, is satisfied that knowledge can, but a Section 112 offence would not have been within the statutory limitation period had it been charged in the first instance, consideration must be given as to whether the charges should be altered or discontinued or the prosecution should not proceed. If a case is to be stopped, care should be taken when choosing the method of termination. 

Allocation 

The Sentencing Council’s Guidelines on allocation provides that: 

In general, either way offences should be tried summarily unless: 

  • the outcome would clearly be a sentence in excess of the court’s powers for the offence(s) concerned after taking into account personal mitigation and any potential reduction for a guilty plea; or 
  • for reasons of unusual legal, procedural or factual complexity, the case should be tried in the Crown Court. This exception may apply in cases where a very substantial fine is the likely sentence. Other circumstances where this exception will apply are likely to be rare and case specific; the court will rely on the submissions of the parties to identify relevant cases. 

In cases with no factual or legal complications the court should bear in mind its power to commit for sentence after a trial and may retain jurisdiction notwithstanding that the likely sentence might exceed its powers. 

In making representations about appropriate venue, prosecutors will generally seek summary trial for appropriate benefit fraud cases involving sums up to £35,000. In assessing whether cases are appropriate for summary trial, prosecutors should refer to the Sentencing Council’s published guidelines for benefit fraud and determine the offence category and likely sentence. Prosecutors should also have regard to the non-exhaustive list of aggravating and mitigating factors below. 

Aggravating factors include: 

  • Whether the claim was fraudulent from the outset; 
  • Whether the proceeds of the fraud funded a lavish lifestyle; 
  • The length of time over which the offending was committed; 
  • The number of false declarations; 
  • Previous convictions, having regard to the nature of the offence to which the conviction relates and its relevance to the current offence and the time that has elapsed since the conviction;
  • Offence committed whilst on bail; 
  • Attempts to conceal or dispose of evidence; 
  • A failure to comply with current court orders; 
  • Offence committed on licence or post sentence supervision; 
  • Offences taken into consideration; 
  • Failure to respond to warnings about behaviour; 
  • Blame wrongly placed on others; and 
  • Damage to any third parties (for example as a result of identity theft). 

Mitigating factors include: 

  • No previous convictions or no relevant/recent convictions; 
  • Remorse; 
  • Good character and/or exemplary conduct; 
  • Serious medical condition requiring urgent, intensive or long term treatment; 
  • Legitimate entitlement to benefits not claimed; 
  • Little or no prospect of success; 
  • Age and/or lack of maturity where it affects the responsibility of the offender; 
  • Lapse of time since apprehension where this does not arise from the conduct of the offender; 
  • Mental disorder or learning disability; 
  • Sole or primary carer for dependent relatives; 
  • Offender co-operated with investigation, made early admissions and/or voluntarily reported offending; 
  • Determination and/or demonstration of steps having been taken to address addiction or offending behaviour; and 
  • Offender experiencing significant financial hardship or pressure at time fraud was committed due to exceptional circumstances. 

Either Way Offences under the Social Security Administration Act 1992 

  • Section 111A(1)(a) – dishonestly making a false representation with a view to obtaining benefit; 
  • Section 111A(1)(b) – dishonestly producing or furnishing a false document/information or knowingly causing or allowing a false document/information to be produced or furnished with a view to obtaining benefit; 
  • Section 111A(1A) – dishonestly failing to promptly notify a change in circumstances affecting any entitlement to benefit; 
  • Section 111A(1B) – dishonestly causing or allowing a person to fail to promptly notify a change in circumstances affecting any entitlement to benefit; 
  • Section 111A (1D) – the recipient of the claimant’s benefit dishonestly failing to promptly notify a change in circumstances affecting the claimant’s entitlement to benefit; 
  • Section 111A (1E) – a person other than the recipient of the claimant’s benefit dishonestly causing or allowing the recipient to fail to promptly notify a change in circumstances affecting the claimant’s entitlement to benefit. 

The penalty for an offence under Section 111A of the SSAA on summary conviction is a term of imprisonment not exceeding six months, or on indictment, a term of imprisonment not exceedings seven years. 

Points to prove 

Section 111A(1)(a) of the SSAA - dishonestly making a false representation 

  • The defendant made a statement or representation with a view to obtaining benefit (whether for himself or for some other person); 
  • The statement or representation was false; 
  • The defendant did so dishonestly. 

The test for dishonesty is detailed above. 

Section 111A(1)(b) of the SSAA - dishonestly producing or furnishing a false document/information or knowingly causing or allowing a false document/information to be produced or furnished: 

  • A document or information was furnished or produced with a view to obtaining benefit; 
  • The information or document was false in a material particular; 
  • The defendant produced that document or furnished that information, or caused or allowed that document or information to be furnished or produced; and 
  • The defendant did so dishonestly. 

Section 111A (1A) of the SSAA - dishonestly failing to notify a change in circumstances: 

  • The defendant was claiming a benefit; 
  • There was a change in circumstances; 
  • The change of circumstances affected his entitlement to benefit; 
  • The change was not a change that is excluded by regulations from the changes that are required to be notified; 
  • The defendant knew the change would affect his entitlement to benefit; and 
  • The defendant dishonestly failed to give a prompt notification of that change in the prescribed manner to the prescribed person. 

The test for dishonesty is detailed above. 

The definition of knowledge is detailed above. 

In failure to report changes of circumstances offences it is not enough to simply show that the change in circumstances “possibly” affected the defendant’s entitlement to benefit. It is necessary to show to the criminal standard of proof that the change “did” in fact affected this entitlement (see King v Kerrier DC [2006] EWHC 500 (Admin)). The prosecution must also prove that the defendant was aware that this change in their circumstances would have affected their entitlement to benefit, as opposed to simply “could have”, and was aware of the person to whom and the manner in which, the notification of this change of circumstance must be made (see Coventry City Council v Vassell [2011] EWHC 1542 (Admin)). 

The Social Security Administration Act 1992 does not strictly prescribe what constitutes prompt notification of a change of circumstances, save the guidance at Section 111A(1G), “a notification of a change is prompt if, and only if, it is given as soon as reasonably practicable after the change occurs”. Whether notification is prompt is a matter of fact for the magistrates to determine on the basis of the other facts as they find them (see Coventry City Council v Vassell [2011] EWHC 1542). 

If the defendant states that he has notified the relevant person of a change in his circumstances, there is no burden on him to prove that notification had been made in accordance with the statutory requirements, as it is for the prosecution to prove, to the criminal standard, each of the matters set out in the legislation (see R (Sedgefield Borough Council) v Dickinson [2009] EWHC 2758 (Admin)).

Section 111A (1B) of the SSAA 1992 - dishonestly causing or allowing a person to fail to promptly notify a change in circumstances: 

  • A person (X) was claiming benefit; 
  • The defendant knew that (X) was claiming benefit; 
  • There was a change in circumstances; 
  • The change of circumstances affected (X)’s entitlement to benefit; 
  • The change was not a change that is excluded by regulations from the changes that are required to be notified; 
  • The defendant knew that the change would affect (X)’s entitlement to benefit; and 
  • The defendant dishonestly caused or allowed (X) to fail to promptly notify the change in the prescribed manner to the prescribed person. 

The offence of “knowingly allowing” can be used, for example, where a claimant is claiming for a partner who is in part time work and the partner does not tell the claimant that his earnings have increased. To prove “allowing”, more than just passive action is required from the defendant. The prosecution must prove that the defendant failed to take some action which, had it been taken, would have resulted in the other person discharging their obligation to report the change of circumstances (see R v Tilley [2009] EWCA Crim 1426).  

Section 111A(1D) of the SSAA - benefit recipient dishonestly failing to promptly notify a change in the claimant’s circumstances: 

  • The benefit recipient was receiving benefit for claimant (X); 
  • There was a change in (X)’s circumstances; 
  • The change in circumstances affected claimant (X)’s entitlement to benefit; 
  • The change was not a change that is excluded by regulations from the changes that are required to be notified;
     
  • The benefit recipient knew that the change in circumstances affected (X)’s entitlement to benefit; and 
  • The benefit recipient dishonestly failed to give prompt notification of the change in circumstances in the prescribed manner to the prescribed person. 

Section 111A(1E) of the SSAA - a person other than the benefit recipient dishonestly causing or allowing the benefit recipient to fail to promptly notify a change in the claimant’s circumstances 

  • The benefit recipient was receiving benefit for (X); 
  • There was a change in (X)’s circumstances; 
  • The change in circumstances affected (X)’s entitlement to benefit;
     
  • The change was not a change that is excluded by regulations from the changes that are required to be notified;
  • A person other than the benefit recipient knew that the change in circumstances affected (X)’s entitlement to benefit; and 
  • That person dishonestly caused or allowed the benefit recipient to fail to promptly notify a change in circumstances in the prescribed manner to the prescribed person. 

Where a claim is false from the outset, a false representation charge either under Section 112(1) of the SSAA, Section 111A(1) of the SSAA or sections 1(2)(a) and 2 of the Fraud Act 2006 should be used. R v Mote [2007] EWCA 3131 confirmed that a person should not be charged for a failure to notify offence where the claim is false from the outset as there is no change of circumstances because the circumstances which disentitle the claimant to benefit existed at the outset of the claim. 

Summary Only Offences under Section 112 of the Social Security Administration Act 1992 

  • Section 112(1)(a) – knowingly making a false representation for the purpose of obtaining a benefit (whether for himself or some other person); 
  • Section 112(1)(b) – knowingly producing or furnishing a false document/information or knowingly causing or allowing a false document/information to be produced or furnished for the purpose of obtaining a benefit (whether for himself or some other person); 
  • Section 112(1A) – knowingly failing to promptly notify a change in circumstances affecting entitlement to his benefit; 
  • Section 112(1B) – knowingly causing or allowing a person to fail to promptly notify a change in circumstances affecting entitlement to that person’s benefit; 
  • Section 112(1C) – benefit recipient (such as an appointee or power of attorney) knowingly failing to promptly notify a change in the claimaint’s circumstances affecting the claimant’s entitlement to benefit; 
  • Section 112(1D) – a person other than the benefit recipient knowingly causes or allows the benefit recipient to fail to promptly notify a change in circumstances affecting the claimant’s entitlement to benefit. 

A person guilty of any of the above offences is liable on summary conviction to a fine not exceeding level 5 on the standard scale or to a term of imprisonment not exceeding 3 months or to both. 

There are specific statutory limitation provisions that apply under Section 116 of the SSAA 1992 (see Limitation Periods for Summary Offences in DWP and Local Authority cases) 

Points to prove 

Section 112(1)(a) of the SSAA - knowingly making a false representation: 

  • The defendant made a statement or representation for the purpose of obtaining benefit (whether for himself or for some other person); 
  • The statement or representation was false; 
  • The defendant knew it was false. 

Section 112(1)(b) of the SSAA: knowingly producing or furnishing a false document/information or knowingly causing or allowing a false document/information to be produced or furnished: 

  • A document or Information was furnished or produced for the purpose of obtaining a benefit (whether for himself or for some other person); 
  • The information or document was false in a material particular; 
  • The defendant produced that document or furnished that information, or caused or allowed that document or information to be furnished or produced; and 
  • The defendant knew that the information/document was false in a material particular or knowingly allowed that document to be produced or that information to be furnished. 

Section 112(1A) of the SSAA-knowingly failing to notify a change in circumstances: 

  • The defendant was claiming a benefit; 
  • There was a change of circumstances;
     
  • The change of circumstances affected his entitlement to benefit;
  • The change was not a change that is excluded by regulations from the changes that are required to be notified; 
  • The defendant knew the change would affect his entitlement to benefit; and 
  • The defendant failed to give prompt notification of that change in the prescribed manner to the prescribed person. 

In failure to report changes of circumstances offences the prosecution must prove that the benefit claimant was aware of the person to whom and the manner in which the notification of the change of circumstance must be made (see Coventry City Council v Vassell [2011] EWHC 1542 (Admin)). 

See above for further guidance on “knowledge” and “prompt notification”. 

Section 112(1B) of the SSAA: knowingly causing or allowing a person to fail to notify a change in circumstances: 

  • A person (X) was claiming benefit; 
  • The defendant knew that (X) was claiming benefit; 
  • There was a change of circumstances; 
  • The change of circumstances affected (X)’s entitlement to benefit; 
  • The change was not a change that is excluded by regulations from the changes that are required to be notified; 
  • The defendant knew that the change would affect (X)’s entitlement to benefit; and 
  • The defendant caused or allowed (X) to fail to promptly notify the change of circumstance in the prescribed manner to the prescribed person. 

See above for guidance on “knowingly allowing”. 

Section 112(1C) of the SSAA - benefit recipient knowingly failing to promptly notify a change in circumstances: 

  • The benefit recipient was receiving benefit for (X); 
  • There was a change in (X)’s circumstances; 
  • The change in circumstances affected (X)’s entitlement to benefit; 
  • The benefit recipient knew that the change in circumstances affected (X)’s entitlement to benefit; and 
  • The benefit recipient knowingly failed to give prompt notification of the change of circumstances in the prescribed manner to the prescribed person. 

Section 112(1D) of the SSAA - a person other than the benefit recipient knowingly causes or allows the benefit recipient to fail to promptly notify a change of circumstances: 

  • The benefit recipient was receiving benefit for (X); 
  • There was a change in (X)’s circumstances; 
  • The change of circumstances affected (X)’s benefit entitlement; 
  • A person other than the benefit recipient knew that the change of circumstances affected (X)’s benefit entitlement; and 
  • That person knowingly caused or allowed the benefit recipient to fail to give prompt notification of the change of circumstances in the prescribed manner to the prescribed person. 

Tax Credit Offence 

Section 35(1) of the Tax Credits Act 2002 (TCA) is an either way offence of being knowingly concerned in fraudulent activity undertaken with a view to obtaining payments of tax credits. 

Points to prove 

  • The defendant with a view to obtaining tax credits for himself or for another person; 
  • Was knowingly concerned in fraudulent activity. 

In order to prove fraudulent activity with a view to obtaining, the defendant must behave in a manner calculated to achieve false benefits payments rather than to capitalise on payment already received. A passive receipt of funds and a deliberate failure to notify the benefits agency of an overpayment, while dishonest, falls short of fraudulent activity (see R. v Nolan (Tracey) [2012] EWCA Crim 671). 

A person who commits an offence under Section 35(1) of the TCA is liable on summary conviction to a term of imprisonment not exceeding six months or a fine not exceeding the statutory maximum or both or, on conviction on indictment, to a term of imprisonment not exceeding seven years or a fine or both. 

Prosecutors should note that the Welfare Reform Act 2012 (Commencement No 32 and Savings and Transitional Provisions) Order 2019 effectively abolishes Child and Working Tax Credits (to be replaced with Universal Credit) with effect from 01/02/2019. The Order also repeals Part 1 of the Tax Credits Act 2002, which contains the offence under Section 35, from that date. Whilst the change in provisions allows for the payment of Tax Credits to specific claimants beyond 01/02/2019, with Section 35 of the Tax Credits 2002 to have continuing effect in those instances, prosecutors ought to instead consider prosecuting under the Fraud Act 2006 in all Tax Credit cases where the offence period spans 1 February 2019.  This will serve to eliminate any issues brought about by the transitional arrangements. The Fraud Act 2006 covers both fraudulent representations and failing to disclose information where there is a legal duty to do so. This does not preclude the consideration of other offences, such as the common law offence of cheating the public revenue, although the statutory Fraud Act 2006 offence ought to be the starting point for consideration.  

Obstruction Offences 

Section 111 of the SSAA (not to be confused with Section 111A) – delay or obstruction of an authorised officer 

This is an obstruction offence and applies in circumstances where an officer authorised to request information under Section 109A or Section 110A of the SSAA has contacted a potential information provider (e.g. an employer for wage information) and that person delays or refuses to provide the authorised officer with the information that has been requested. Section 111 is very much an offence of last resort and is used when it is clear that the information provider wilfully will not provide FES with the information that has been requested. 

Points to prove 

  • The defendant intentionally delayed or obstructed; 
  • An authorised officer; 
  • In the exercise of any power under the Social Security Administration Act (other than an Inland Revenue power); 

OR 

  • The defendant Refused or neglected; 
  • To comply with any requirement under Section 109BA or Section 110AA or with the requirements of any arrangements entered into in accordance with subsection (1) of that section 

OR 

  • The defendant refused or neglected; 
  • to answer any question; or 
  • Furnish any information; or 
  • To produce any document when required to do so under this Act (otherwise than in the exercise of an Inland Revenue power). 

The maximum penalty for an offence under Section 111 of the SSAA is a fine not exceeding level 3 on the standard scale.  

Where a person is convicted of an offence under Section 111 and the refusal or neglect is continued by him after his conviction, he shall be guilty of a further offence and liable on summary conviction to a fine not exceeding £40 for each day on which it is continued. 

Limitation Periods for Summary Offences in DWP and Local Authority Cases 

The limitation periods for Section 112(1) and Section 112(1A) of the Social Security Administration Act 1992 (SSAA) offences are set out in Section 116(2)(a) and (b) of the SSAA 1992.  

Proceedings for Section 112(1) and Section 112(1A) of the SSAA offences must be commenced before whichever is the later of the following: 

  • within 12 months from the date of the commission of the offence; or 
  • within 3 months from the date on which evidence, sufficient in the opinion of the Secretary of State to justify a prosecution for the offence, comes to his knowledge. 

Calculating the summary limitation periods 

The 12 month limitation period starts to run from: 

  • In a false representation offence under Section 112(1) of the SSAA, the date on which the false representation, information or document was received at the benefit office; or 
  • In a failure to report a change of circumstances offence under Section 112(1A) of the SSAA, the last date of the offending period. 

For example, in a failure to report a change of circumstances offence where the offence period is between 01/01/2010 and 31/12/2010, the limitation period will expire on 31 December 2011. The case of Smith v North Somerset DC [2007] EWHC 1767 is authority for the proposition that in the case of a continuous offence under the SSAA 1992, the limitation period does not start to run until and from the closing date of the offence, i.e. a claimant’s failure to notify of a change in circumstances is a continuing offence within the period in which he is in receipt of benefits. 

The closing date for a Section 112(1A) of the SSAA offence will usually be the date DWP/LA became aware of the change and suspends or ceases to pay benefit, but it will depend on the facts of the case. 

The 3 month limitation period 

The sufficiency of evidence date should normally be the date the last piece of essential evidence became available to the Secretary of State.

Under Section 116 of the SSAA 1992 , the Secretary of State (in practice the fraud Investigator’s manager, acting on delegated authority) not the prosecutor, decides when the 3 month period commences for the purpose of extending limitation. The fraud investigator’s manager will issue and sign a certificate providing the date on which sufficient evidence to justify a prosecution came to the attention of the Secretary of State. DWP FES can determine the sufficiency of evidence date and issue certificates under Section 116 (2)(a) of the SSAA 1992 for summary offences in connection with social security. Social security is defined in SSAA 1992 and includes Housing Benefit and Council Tax Benefit. 

Where a local authority has investigated the cases Section 116(2)(b) of the SSAA 1992 enables the Local Authority to make the decision on the sufficiency of evidence date and issue a Section 116 certificate in respect of the offences connected with Housing Benefit / Council Tax Benefit only. The SSAA 1992 does not allow the DWP to delegate the function of determining the sufficiency of evidence date or issuing Section 116(2)(a) SSAA certificates in respect of DWP benefit offences to LA officers. This applies in all cases where an LA officer has investigated DWP offences and includes where the LA investigator is authorised under Section 109A of the SSAA and acting as service provider to the DWP as part of SFIS. 

Where the case includes a number of offences (including where there are offences against DWP and LA administered benefits), the sufficiency of evidence date must be considered separately for each offence. 

False representation offences 

In a Section 112(1)(a) offence the evidence is sufficient as soon as the investigator establishes that, for the purpose of obtaining benefit for himself or another, the defendant made a statement or representation which he knew to be false. The evidence is likely to be sufficient at the close of the investigation into the facts and before any assessment is made of the effect of the false representation on entitlement to benefit. In many cases, this may be the interview under caution, but it will depend on the facts. Comments made by a suspect during any interview under caution may necessitate further lines of enquiry before it can be said that the investigator has evidence sufficient to “justify” a prosecution. Alternatively, as was the case in Eyeson v Milton Keynes Council [2005] EWHC 1160 (Admin) (March 2005), Moses J (as he then was) held (at paragraph 26) that, “Section 116(2)(b) does not refer to any public interest requirement but focuses particularly upon a sufficiency of evidence requirement in the opinion of the local authority. It is not, therefore, open to them to delay on the basis that they need more information before deciding whether it was in the public interest to prosecute the lady”. 

Unfortunately this approach was favoured in Azam v Epping Forest District Council [2009] EWHC 3177 (Admin). Cranston J held (at paragraph 25(2)) that, “the court must address the issue of when sufficient evidence in the opinion of the prosecutor to justify a prosecution came to his knowledge. To be taken into account is that a margin of judgment is conferred on prosecutors to form an opinion about the sufficiency of the evidence to justify a prosecution. Any additional time taken to decide whether notwithstanding the evidence a prosecution is in the public interest must be ignored. Moreover, prosecutors cannot prevent time running by not applying their mind to the case; they cannot avoid forming an opinion and any such period is to be discounted”. However, in paragraph 32 of his judgment he goes on to say, “the prosecutor could well have been criticised in deciding to launch a prosecution without knowing the precise extent of the overpayment irrespective of whether or not … the extent of the overpayment is a necessary element of an offence under section 112(1A).” 

However, contrast the above with the recent decision in R v Woodward [2017] EWHC 1008 which related to offences brought under Section 4 of the Animal Welfare Act 2006. In Woodward and others the court stated, “the relevant date is the date upon which the prosecutor considers that, upon the available evidence, it is in the public interest to prosecute the particular individual or individuals. That decision needs to be made with especial care; and it cannot be avoided or delayed by the mere "shuffling of papers", or by information being sat on so as to extend the time limit”. Whilst prosecutors may observe that under the Animal Welfare Act the test is whether there is evidence which the “prosecutor” thinks is sufficient, whereas, under the SSAA the test is whether there is evidence which the “Secretary of State” thinks is sufficient, the principle is presumably still the same. 

The point to take away from the conflicting case law on this issue is that each case should be considered on its own facts and the investigator must make the decision on sufficiency of evidence at the first available opportunity, and must not delay doing so. 

Failure to notify offences 

Under Section 112(1A), no offence is committed unless the change of circumstances relied upon is one which affects the claimant’s entitlement to benefit (see R v Passmore [2007] EWCA Crim 2053). The evidence will not be sufficient until there is confirmation from a Decision Maker  http://www.dwp.gov.uk/publications/specialist-guides/decision-makers-guide/ that the relevant change of circumstances did in fact affect entitlement. An identical evidential requirement appears in subsections (1B), (1C) and (1D).Producing or furnishing false documents or information. 

In a Section 112(1)(b) offence the evidence is not sufficient until it also proves that the document or information was false in a material particular. Therefore, as well as establishing those matters necessary under section 112(1)(b) it is also necessary to prove that the particular falsehood contained in the document or information is material, i.e. “material to the entitlement of the claimant to benefit”. Therefore, the only way to prove the materiality of the falsehood is to assess the effect of it on the claimant’s entitlement to benefit and, as with Section 112(1A) offences above,  this will take place at the second stage after FES have completed their investigation into the facts. 

To guard against abuse of process arguments, prosecutors will scrutinise the Secretary of State certificate and the case chronology to ensure that the certificate has been properly issued so that proceedings can be lawfully commenced within the limitation period. 

Where the 3 month limitation period has been applied and a certificate issued pursuant to Section 116 of the SSAA 1992, the Court should not go behind the certificate unless the certificate is inaccurate (i.e. wrong on its face or patently misleading) or can be shown to be fraudulent (see Azam v Epping Forest DC EWHC 3177 (Admin) and R v Haringey Magistrates Court, ex parte Amvrosiou (unreported, 13 June 1996)). 

Prosecutors must refer the case to their unit head and policy leads if challenged on the validity of the Secretary of State’s certificate.  

Other Offences and Benefit and Tax Credit Fraud 

  • Fraud Act; 
  • Theft Acts; 
  • Identity Fraud (including Forgery and Counterfeiting); and 
  • Common law conspiracy to defraud or to cheat the Revenue. 

Other Offences - Issues to Consider 

Subject to governing principles set out in the Charging Standard and elsewhere in the Legal Guidance, prosecutors considering offences contrary to the general criminal law may also need to consider the followings: 

  • Section 15A of the Theft Act 1968 - obtaining money transfers by deception. This offence may be used for payments made by Automated Credit Transfer (ACT) between 18/12/1996 and 15/01/2007 i.e. pre the Fraud Act 2006; 
  • Section 24A of the Theft Act 1968 - dishonestly retaining a wrongful credit. This offence may be used for offences after 18/12/1996 and may be appropriate where the original claim form has been lost or destroyed; 
  • Section 17 of the Theft Act 1968 - False Accounting. An application form for Housing Benefit is a document used for an accounting purpose and therefore the giving of false information on the form could constitute an offence under Sectoin 17(1)(b) (see Osinuga v DPP [1998] Crim LR 216); 
  • The Forgery and Counterfeiting Act 1981, Identity Documents Act 2010 and Identity Cards Act 2006, where a forged document has been presented in support of a claim for benefit or in support of an application for a National Insurance Number. 

A forged National Insurance Number (NINO) Card: 

  • is a false instrument for the purposes of Section 1 and Section 3 of the Forgery and Counterfeiting Act 1981 but not Section 5; 
  • could be an article for use in fraud under Section 6 or Section 7 of the Fraud Act 2006; but 
  • is not an "identity document" for the purpose of the now repealed Sectoin 25 of the Identity Cards Act 2006; 
  • is not an "identity document" for the purposes of Section 4 to Section 6 of the Identity Documents Act 2010; 

A forged birth certificate: 

  • is a false instrument for the purposes of Section 1, Section 3 and Section 5 of the Forgery and Counterfeiting Act 1981; 
  • could be an article for use in fraud under Section 6 or Section 7 of the Fraud Act 2006; but 
  • is not an "identity document" for the purpose of the now repealed Section 25 of the identity Cards Act 2006; 
  • is not an identity document for the purpose of Section 4 to Section 6 of the Identity Documents Act 2010; 

A valid birth certificate or NINO card presented by someone purporting to be that person (for example in a hijacked identity case): 

  • could be an article for use in fraud under Section 6 or Section 7 of the Fraud Act 2006; but 
  • is not within the definition of "false" under Section 9 of the Forgery and Counterfeiting Act 1981; 
  • is not within the definition of "identity document" for the purpose of the repealed Identity Cards Act 2006 or the Identity Documents Act 2010; but 
  • other Fraud Act offences may apply e.g. Section 6 or Section 7 of the Fraud Act 2006 - possession of articles for use in frauds and making or supplying articles for use in fraud. 

Prosecutors should refer to the Legal Guidance chapter on Forgery and Counterfeiting for further details on the above offences. 

Bail 

Unconditional bail should be the default position in postal charge and requisition cases. In police arrest cases, bail should be determined on the facts if there are no instructions on file. 

Prosecutors should refer to the Legal Guidance chapter on Bail for further details. 

Proof in Absence 

Cases may be proven in absence if the requirements are met. 

Warrants 

If a warrant is sought following a failure to attend court at an initial or subsequent hearing, it should be executed adopting the same process as other CPS cases. Where CPS areas are informed by HMCTS that a warrant has been executed and the case has been listed, the CPS Area should check whether they have the prosecution file. 

Witness Care 

All witness care is arranged by DWP FES investigators in conjunction with prosecutors. Witness Care Units are not currently used for DWP cases, although the court’s Witness Service is used. 

Sentencing DWP/Local Authority/HMRC Benefit Fraud Cases 

The Sentencing Guidelines produced by the Sentencing Council for benefit fraud (including tax credit) offences apply. 

Post-Conviction Orders  

Costs Orders 

CPS policy on costs applications for convicted defendants applies to all cases and prosecutors should apply for prosecution costs in accordance with the CPS scales. 

If investigation costs are sought (unlikely in DWP investigated cases but possible in LA investigated cases), the prosecution file will include specific instructions and will contain a schedule / breakdown of investigation costs sought. 

Compensation Orders 

DWP can recoup overpaid benefit using its own in house debt management procedures, which is why compensation is not regularly sought in DWP investigated cases.  

Clear instructions will be provided to the CPS advocate in the case file if a compensation order is sought, including the address to which compensation order payments should be made. The advocate should not apply for a compensation order if the defendant has already started repaying the overpayment back to the department.  

The power of the Court to make Compensation Orders is governed by the Powers of Criminal Courts (Sentencing) Act 2000. The maximum sum that may be ordered for any offence committed prior to or spanning the 11/12/2013 is £5,000 and is restricted to the total of the amounts on the substantive charges, together with those on the Taken Into Consideration (TIC) schedule, up to a total of £10,000 in the Magistrates’ Court. For offences committed wholly on or after the 11/12/2013, there is no limit on the value of a single compensation order handed down to an adult offender, 18 years and older, by a Magistrates’ Court. Similarly, there is no limit on the value of a compensation order made by the Crown Court. 

Department for Work and Pensions (DWP) may ask the CPS to apply for compensation orders when the following circumstances apply: 

  • the defendant is not receiving benefit and is unlikely to receive benefits within 6 months of the date the case is concluded in court. This assures, as far as possible, that the defendant is likely to repay any order in a reasonable timescale, normally considered to be one or two years; 
  • the total overpayment, less any amount repaid, does not exceed £5,000, (except in exceptional cases outlined below); 
  • the compensation order covers the whole of the overpayment and the overpayment is not split, that is, only part of the recoverable overpayment is covered by the compensation order; 
  • Housing Benefit and / or Council Tax Benefit should be included in the compensation order providing that agreement is obtained from the Local Authority; 
  • in exceptional circumstances, where the overpayment exceeds £5,000 and it is clear that the defendant has sufficient means to pay the entire compensation order within a 2 year period, for example, cases of undeclared capital. 

Advocates should note that compensation payments must be made payable to the DWP in DWP investigated cases and not to the CPS. Payments paid incorrectly to the CPS will result in an accounting error requiring rectification procedures. 

Confiscation Orders 

Compensation orders must not be sought where the Department is requesting a financial hearing for confiscation. 

Prosecutors will follow the guidance issued by the DPP on whether the case is suitable for a confiscation order.  

Where a financial investigation has been conducted, confiscation proceedings and prosecution costs are dealt with by way of a confiscation hearing in the Crown Court. This takes place after a guilty plea or verdict and in conjunction with sentencing. Sentencing may in some circumstances be delayed until the financial hearing takes place. 

Where a confiscation order is to be sought, full instructions will be provided to the advocate. The file should include a Section 70 POCA notice. The instructions will also set out whether a compensation order should be paid out of a confiscation order under Section 13 of the Proceeds of Crime Act 2002.  

As of 01/07/2019 the DWP will be considering on a case by case basis whether to proceed with a financial investigation and potential confiscation order application were the defendant’s only considerable asset is their home.  The effect of pursuing a defendant in such circumstances may result in them having to apply for housing costs.  Instead, the DWP will look to recover losses by civil means rather than via confiscation proceedings. 

In all other respects, advocates should refer to the Legal Guidance chapter dealing with proceeds of crime and ancillary orders. 

Deportation 

Non-British citizens convicted of a specified offence and sentenced to a term of imprisonment for at least 12 months may be liable to deportation (see Section 32 of the UK Borders Act 2007). The police or the investigating officer following consultation with the UK Borders Agency are responsible for serving deportation orders (form IM3) on the defendant at least seven clear days before the date of the sentence.  

Prosecutors should refer to the Legal Guidance chapter on Sentencing – Ancillary Orders for further details on deportation. 

Loss of Benefit following Conviction 

Since 01/04/2002, the loss of benefit provisions contained in Social Security Fraud Act 2001 have made it possible to restrict payment of benefit for 13 weeks following a conviction for a second benefit fraud offence where the offence was committed: 

  • within 3 years of a previous conviction where the second offence was committed before -01/04/2008; or 
  • within 5 years of a previous conviction where the second offence was committed on or after 01/04/2008. 

From 01/04/2010, further loss of benefit provisions amending Section 11(1) of the Social Security Fraud Act 2001 made it possible to impose a restriction of benefit payment for 4 weeks following a conviction, a caution or an administrative penalty for a first benefit fraud offence. 

In April 2013 the Loss of Benefit Provisions under sections 117 to 119 of the Welfare Reform Act 2012 came into force bringing further amendments to Social Security Fraud Act 2001. Those who accept administrative penalties, cautions or who are convicted of benefit offences may be subject to “the loss of benefit rules”. Where the rules apply, the claimant may have their benefit payment reduced wholly or in part for a number of weeks. 

Different provisions apply to persons accepting administrative penalties or cautions but for those convicted of offences committed wholly after 01/04/2013. The reduction periods will be: 

  • For a first conviction – 13 weeks disqualification from benefit (previously 4 weeks); 
  • For a second offence committed within 5 years – 26 weeks (previously 13 weeks); 
  • For a third offence committed within 5 years – 3 years (previously 13 weeks); 
  • For a single conviction for a serious or organised benefit or identity fraud – (whether for a first or subsequent conviction) - 3 years (new). 

Serious or organised benefit or identity fraud 

By virtue of Section 118 of the Welfare Reform Act 2012 a conviction for any of the following offences will result in a three year disqualification or reduction of benefit. Offences under: 

  1. Section 8 of the Accessories and Abettors Act 1861;  
  1. Section 1 of the Criminal Law Act 1977; 
  1. Sections 1,3,4 or 5 of the Forgery and Counterfeiting Act 1981; 
  1. Sections 6 or 7 of the Fraud Act 2006; 
  1. Sections 44, 45 or 46 of the Serious Crime Act 2007; 
  1. Section 182 of the Social Security Administration Act 1992; 
  1. Sections 327, 328 or 329 of the Proceeds of Crime Act 2002; or 
  1. Sections 4, 5 or 6 of the Identity Documents Act 2010. 

if it is found by the court to have been accompanied with one of the following: 

  • the offence resulted in an overpayment of at least £50,000; 
  • the offence has been punished by a custodial sentence of at least one year (including a suspended sentence); or 
  • the offence was committed over a period of at least 2 years. 

In the case of offences committed under: 

  • Section 1 of the Fraud Act 2006; 
  • Section 35 of the Tax Credits Act 2002; or 
  • Section 111A of the Social Security Administration Act 1992. 

The three year disqualification or reduction of benefit penalty will apply if it is found by the court to have been accompanied by one of the following: 

  • the offence resulted in an overpayment of at least £50,000; or 
  • the defendant has been punished with a custodial sentence of at least one year (including a suspended sentence). 

In England and Wales, a conviction for an offence of conspiracy to defraud at common law will automatically trigger the three year reduction of benefit sanction. None of the above conditions are required. 

In all cases to which the loss of benefit provisions apply, the Regulations make provision for a reduced rate of means tested benefits or hardship payments to be payable in exceptional circumstances throughout the disqualification period. 

Diversion from Prosecution 

Disposals available to DWP for alleged benefit fraud 

When an allegation of benefit fraud is received by the DWP, the allegation is assessed and a decision is made whether the case is to be investigated to criminal investigation standards or referred for an alternative form of intervention through customer compliance or other methods. 

DWP civil route - Customer compliance and civil penalties 

Where a DWP case is dealt with by customer compliance, the claimant will be interviewed and questioned about any allegations made. Following the interview, the claimant may be reminded of their notification obligations whilst in receipt of benefit, advised about future conduct and action may be taken to rectify their claim. 

If the grounds in Section 115C of the SSAA 1992 and Section 115D of SSAA 1992 are made out, a civil penalty of £50 may be imposed where an overpayment exceeds £65 and is incurred wholly after 01/10/2012. 

The grounds are that the claimant negligently made or gave an incorrect statement or incorrect information in connection with a claim or award of a social security benefit, the person failed to take reasonable steps to correct the error, the error resulted in an overpayment and the person has not been charged with an offence or cautioned or given an administrative penalty notice in respect of the overpayment. 

Local Authorities’ civil route 

Section 115C and Section 115D of the SSAA 1992 apply to Local Authorities. LAs apply their own local enforcement policies. Some LA policies adopt similar policies on customer compliance and civil penalties to those applied by DWP. 

Disposals available to DWP and LA Investigators following a Criminal Investigation 

Administrative Penalties (“Adpens”) 

Administrative penalties are applied by DWP FES and LA investigators under Section 115A and Section 115B of the Social Security Administration Act 1992 as an alternative to submission to the CPS to consider prosecution for offences connected with DWP and LA administered benefit. Section 115A of the SSAA1992 does not apply to tax credits. 

Administrative penalties are an alternative to prosecution where the case is deemed not to be so serious that prosecution should be considered in the first instance.  Under Section 115A and Section 115B of the SSAA 1992 an administrative penalty can be offered where there are grounds for instituting proceedings for an offence against that person.  

Prosecutors are not involved in the decision to offer administrative penalties. Prosecutors can ask FES to consider offering an administrative penalty where there is no evidence that FES has considered offering an administrative penalty and the prosecutor believes this would be a suitable means of disposal. 

Administrative penalties under Section 115A of the SSAA 1992 differ from simple cautions in that no admission of guilt is required before one can be offered to the defendant, although there is a statutory requirement for investigators to ensure that there are grounds for instituting criminal proceedings for an offence (this includes the need to ensure that there has been no unusually long or inexcusable delay) and that the individual is provided with a written notice concerning the offer of the penalty and its operation. The individual has the option to accept the administrative penalty and a period of 14 days to reconsider their decision. In the event of the individual declining to agree to pay an Ad-Pen, criminal proceedings should be brought unless exceptional circumstances apply, for example, the person’s health deteriorates dramatically before proceedings can be instigated. 

Administrative penalties do not appear on a PNC record, however, they may be admissible under the bad character provisions. 

For offences committed prior to or spanning 08/05/2012, Section 115A of the SSAA 1992 sets the level of the administrative penalty at 30% of the overpayment(s) relating to that offence. 

For offences committed wholly after08/05/2012, Section 115A of the SSAA 1992 sets a minimum administrative penalty of £350, or 50% of the amount overpaid whichever is the greater, up to a maximum penalty of £2,000. 

On 08/04/2014 the government announced the intention to increase the maximum administrative penalty to £5,000, with the new limit being introduced in April 2015 subject to Parliamentary approval.

The Administrative penalty under Section 115A of the SSAA 1992 must be paid in addition to repaying any overpayment. 

An Administrative penalty of £350 can be issued where the offence did not result in an overpayment. 

It was DWP policy to offer these penalties where the case is deemed to be not so serious that prosecution should be considered in the first instance. The offer of an administrative penalty was generally made, as an alternative to referral to the CPS to decide whether to prosecute, where the gross overpayment did not exceed £4,000 (although see below) and there were no aggravating features (detailed above). This £4,000 overpayment upper limit was DWP policy, and is not prescribed in statute. The £4,000 overpayment upper limit came into effect in July 2014. The upper limit prior to July 2014 was £2,000. 

The current position is that for cases where the interview under caution is conducted on or after 14/08/2017, an administrative penalty should normally be the first consideration where the total recoverable overpayment is less than £5,000, unless aggravating factors apply (detailed above). Prosecution should normally be considered in the first instance for overpayments higher than £5,000, but each case should be judged on its own merits. 

Local Authorities can decide on the suitability of an administrative penalty as a disposal for offences connected with Housing Benefit and Council Tax Benefit only. In doing so, Local Authorities follow their own enforcement policies. The amount of penalty remains as prescribed by statute but the level of overpayment to which the administrative penalty applies will vary between authorities. 

Many Local Authorities follow DWP criteria on offering administrative penalties. 

Local Authorities cannot decide on (and DWP cannot delegate the function of deciding upon) the suitability of an administrative penalty as a disposal for offences connected with DWP administered benefits. Local Authorities can under Section 115A(7A) and (7B) of the SSAA 1992 enter into an agreement with DWP to undertake the process of offering an administrative penalty. This restriction on delegation applies even where the Local Authority officer has investigated offences connected with DWP administered benefits and where it is acting as service provider to the DWP under Section 109A of the SSAA 1992 authority as part of SFIS. LA officers participating in the SFIS pilots will be expected to apply DWP policy on administrative penalties, subject to any restrictions on delegation. 

HMRC officers (either acting jointly with DWP or as part of SFIS) have no statutory authority to offer administrative penalties under Section 115A of the SSAA 1992. 

Civil Penalties Available in Tax Credit Cases 

Where a tax credit case is investigated but does not meet the DWP’s criteria for submission for prosecution the case may be referred to HMRC to consider whether a civil penalty or other disposal will apply. 

DWP Simple Cautions 

For offences committed wholly before 01/04/2012, DWP FES investigators would offer what DWP termed as “administrative” cautions in appropriate cases. “Administrative” cautions were, in effect, the same as simple cautions and offered in accordance with Home Office Circular 16/2008. DWP “administrative “cautions are not registered on the PNC but registered centrally within DWP. Previous DWP cautions will be recorded on the DWP prosecution file. 

DWP has ceased offering simple cautions for offences committed wholly after 01/04/2012, following a ministerial policy decision only to use administrative penalties as an alternative to submitting to the CPS to make a decision whether a prosecution should take place. 

This does not affect the prosecutor’s ability to advise that a simple caution is an appropriate penalty in appropriate cases. 

Local Authorities and Simple Cautions 

Local Authorities apply their local enforcement policies which may include applying simple cautions.  

Local Authority Investigators can investigate offences in connection with a prescribed range of benefits and may offer cautions at the end of such investigations. LAs must apply local government legislation in exercising LA functions but there is no other statutory restriction on LAs administering simple cautions. 

Local Authority officers participating in and investigating as part of the SFIS pilots will be expected to apply DWP policy on simple cautions. 

Prosecutors with queries about DWP, LA or HMRC enforcement policy are asked to contact the policy lead. 

Out of Court Disposals Available to Prosecutors 

The DWP policy on the use of simple cautions has no impact on prosecutors’ ability to advise the use of a simple caution in appropriate cases. 

Cases fall into two categories: 

  • Offences wholly pre April 2012, where the criteria in DWP’s previous cautions policy or Section 115A of the SSAA 1992 are fully met. Prosecutors may, in consultation with FES/LA, consider referring appropriate cases back to DWP FES/LA for a caution to be administered or an administrative penalty to be offered. Such cases may include where the offender did not engage in the caution or administrative penalty process owing to a lack of understanding or knowledge of the offer or where there is no evidence that DWP FES/LA considered its enforcement (penalty) policy. 
  • Offences occurring wholly post April 2012 or where offending takes place both before and after that date. Prosecutors may, in consultation with DWP FES/LA, consider referring appropriate cases back to DWP FES/LA for an administrative penalty to be offered. Such cases may include where the offender did not engage in the caution or administrative penalty process owing to a lack of understanding or knowledge of the offer or where there is no evidence that DWP FES/LA considered its enforcement (penalty) policy. Prosecutors will advise the offer of a simple caution only in exceptional circumstances. 

When considering the Public Interest Test prosecutors should take into account the relevant enforcement policy and that, in the application of the disposal hierarchy, only the most serious cases are referred to the CPS. 

CPS guidance in Cautioning and Diversion on the use of out of court disposals applies in all cases. 

Any decision to advise DWP FES or SFIS to offer a caution or administrative penalty must be approved before it is communicated to FES or to the defence. 

If the offer of a caution or an administrative penalty is declined by the defendant the prosecutor should reconsider prosecution in line with CPS guidance and the Code. 

If DWP FES/SFIS/LA decline to offer a simple caution the CPS will not prosecute and there will be no further action in the case. 

Conditional Cautions 

Conditional Cautions are not generally available for DWP/LA benefit offences unless the offender is a foreign national and the provisions of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 apply. If the provisions apply and the criteria for conditional cautions are satisfied the CPS can direct that a conditional caution be issued with the object of bringing about the foreign national offender's departure from the UK and/or ensuring they do not return for a period of time. 

CPS Powers to Prosecute Department for Work and Pensions and Department of Health cases 

With effect from the 01/04/2012 the Attorney General assigned functions to the DPP to institute, conduct and assume criminal proceedings in England and Wales and to provide legal advice in respect of criminal investigations conducted by or on behalf of: 

  • The Secretary of State for Work and Pensions; 
  • The Secretary of State for Health, also criminal investigations conducted by him/her on behalf of the Welsh Ministers (subject to their ongoing consent). Similarly, criminal investigations conducted by or on behalf of the NHS Business Service Authority; 
  • Local authorities in respect of benefit offences within the meaning of Part VI Social Security Administration Act 1992 where the Director has agreed to prosecute the Local Authority cases (usually via service level agreement or Memorandum of Understanding). 

Crown Prosecutors designated under Section 1 of the Prosecution of Offences Act 1985 and Associate Crown Prosecutors designated under Section 7A of the Act have the same powers in respect of the cases investigated by those listed in the paragraphs above as in every other case conducted by the CPS. 

Provisions in the Welfare Reform Act 2012 permit information to be passed to the CPS from DWP to enable the DPP to discharge those functions. 

Joint investigations are sometimes conducted between DWP and HMRC Investigators, led by the DWP. Under SFIS arrangements DWP, HMRC and Local Authority investigators authorised by the Secretary of State under Section 109A of the SSAA 1992 will also conduct tax credit investigations. All CPS prosecutors can prosecute these cases. It is not necessary to be a designated Revenue and Customs Prosecutions Office prosecutor. 

Likely Questions Raised by Defence 

Adjournment pending the benefit appeal?

See above for further guidance. 

The defence may claim that a prosecution should cease because a repayment has been made or commenced. Prosecutors should request from DWP details of the amount of any benefit repaid by the defendant shortly before the requisition is issued. This information should be recorded on the prosecution file. However, partial or total repayment will not of itself lead to a review of the decision to prosecute, although it can be used in mitigation by the defence. 

The overpayment letter that is sent to a claimant should state that any overpayment recovery action taken by the Department does not preclude the Department from taking any other action, including criminal proceedings, against the claimant. If the defence assert that the Department assured the defendant that he would not be prosecuted the prosecutor should ask the defence to provide details of any assurances made so that the DWP/LA can investigate further. 

On 28/11/2006, the Lord Chief Justice (LCJ) delivered a judgment for the Court of Appeal in R v Abu Hamza [2007] 1 Cr. App. R. 27.  This is the leading case where abuse arguments are raised on the basis of breach of an undertaking not to prosecute. The LCJ stated at paragraph 50, “… circumstances can exist where it will be an abuse of process to prosecute a man for conduct in respect of which he has been given an assurance that no prosecution will be brought. It is by no means easy to define a test for those circumstances other than to say that they must be such as to render the proposed prosecution an affront to justice.” The Court of Appeal's decision in Abu Hamza demonstrated that it is not likely to constitute an abuse of process to proceed with a prosecution unless there has been: 

  • An unequivocal representation by those with the conduct of the investigation or prosecution of a case that the defendant will not be prosecuted; and 
  • The defendant has acted on the representation to his detriment. 

Defence claim “Lifetime award” of benefit was made 

Some defendants claim that they were awarded a “lifetime award” of Disability Living Allowance and that consequently there was no duty to report an improvement in their condition. The term “for life” was substituted with “for an indefinite period” by Section 67(1) of the Welfare Reform and Pensions Act 1999 on 12/01/2000 and such awards are subject to the claimant continuing to satisfy conditions for receiving DLA. 

Doubtful disability cases – defendant’s condition remains 

In DLA or PIP cases, the prosecution will not usually allege a failure to declare work or assert that the defendant is not disabled or unable to work, as sometimes DLA claimants will undertake limited work with the sanction of their GPs and the Department. The fact that the defendant continues to have a medical condition may also be agreed. In DLA cases the prosecution will usually allege a failure to report an improvement in the defendant’s mobility or a reduction in caring needs. The defence may assert that the evidence (often surveillance based) only represents the defendant on a “good day” and that the “bad days” justify the declared mobility and caring needs. The prosecution’s case will usually consist of a pattern of observations or other probative evidence over a period of time to rebut this. 

Prosecutors should note, whilst the claimant’s award letter may state, for example, that claimant is deemed unable, or virtually unable to walk, careful scrutiny of the claims forms submitted throughout the duration of the claim period is required in order to ascertain what representations the defendant actually made in respect of their mobility restrictions and/or care needs. 

Defence claim the Department sanctioned the work – permitted work or therapeutic earnings rules 

The “permitted work” and “therapeutic earnings rules” permit claimants, in limited circumstances, to continue to receive benefits based on incapacity whilst they are working. If agreed with the Department beforehand, some limited employment may be permitted whilst some sickness benefits are paid as part of a treatment order or to facilitate workplace reintegration. If the defence is lack of dishonesty or knowledge due to the Defendant’s belief that these rules applied, further evidence may be required on the application of the rules, what was explained to the Defendant and what was declared in the Defendant’s dealings with the Department. 

Unpaid work or payment in kind 

Where the working relationship is more informal with no record of remuneration, it may be asserted that the work was not declared because no wages were paid or wages were “in kind” (e.g. free meals). However, this does not mean that the defendant was not working. In Clear v Smith [1981]1 WLR 399 the court held that a person can be classed as working/employed even if they have not been remunerated for it. 

Impersonation 

Sometimes the defendant denies working, asserting that a friend or close relative used their bank account to receive the wages. Good employer identification evidence will usually prove who was working, especially where photographic ID was used at work. 

Capital/assets/savings belonged to someone else 

Where it is asserted that money in the defendant’s bank account or other asset does not belong to the defendant, rather it is being held for someone else or on trust for another or for the benefit of another, e.g. grandchildren, it may fall to the court to decide this as a preliminary issue of fact. Such cases require careful review. 

Living together not continuous 

If the defence claim that the alleged partner only resided at the claimant’s address for a couple of nights during the week, it should be noted that the prosecution does not have to prove cohabitation for every day of the week in order to prove a charge of undeclared “living together as husband and wife”, however, the prosecution does have to prove, to the criminal standard, that the defendant knew that the fact that his/her partner was living at the address was, by itself, a relevant change of circumstance that had to be notified. 

The “signposts” for determining whether two people are living together as a married couple for the purposes of means tested benefits (Crake and Butterworth v SBC [1982] 1 All ER 498) are as follows: 

  • Whether they are living in the same household; 
  • Whether they are in a sexual relationship; 
  • Their financial relationship; 
  • The stability of their relationship; 
  • Whether they have any children; and 
  • How they appear in public. 

No one factor is conclusive as the overall relationship and particular circumstances are looked at (R(SB) 17/81; R(G) 3/71; CIS/87/1993), and the emotional aspect of the relationship (i.e. interdependence, devotion, love and affection) should be considered (PP v Basildon District Council (HB) [2013] UKUT 0505 (AAC)). 

Two people who live in the same household for “care, companionship and mutual convenience” may not be living together as a married couple (R(SB) 35/85) and physical presence in itself is not conclusive. There must be a particular kind of tie binding the two together in a domestic establishment. 

Defence request a “notional entitlement calculation” 

The defence regularly request a “notional benefit entitlement” calculation to be prepared for the defendant. 

The justification for the request is based on the assertion that notwithstanding the defendant’s fraud, it is possible the defendant could have lawfully claimed other benefits or tax credits had the defendant told the Department or Local Authority the truth about their circumstances.  

If requested to provide a notional calculation prosecutors are requested to inform the court that claimants have no entitlement to benefits which they have not applied for and for which they have not provided the proper claims information (Section 1 of the Social Security Administration Act 1992).

Under Section 17 of the Social Security Act 1998 the overpayment figure provided by the Decision Makers will be the amount that has to be paid back to the Department unless it is reviewed by the DWP/LA or superseded on appeal to a benefit tribunal. 

An overpayment of a social security welfare benefit cannot be offset with a notional entitlement to tax credits (R (on the application of Larusai) v The Secretary of State for Work and Pensions [2003] EWHC 371, QBD). 

The courts can, however, take the notional calculation into account for the purpose of mitigation. See R v Parmer [2006] EWCA Crim 979 and R v Majid [2010] EWCA Crim 1648.  In the former, Mr Justice Forbes stated, “There was the question of the Tax Credits to which she was entitled. We agree with Mr Cooke's submission that the judge appears to have treated that consideration as irrelevant. In our judgment, it was a relevant consideration for the purposes of mitigation”. But contrast with the latter, Mr Justice Dais stated, “the appellant was entitled to child tax credits … Whatever the truth on that, we think that particular point, given the circumstances, can only have limited weight”. 

Notwithstanding the above however, if the court orders that the prosecution produces this calculation, the prosecutor should inform the DWPFIS to arrange for this calculation to be prepared. 

Defence dispute amount attributable to offending 

Section 17 of the Social Security Act 1998 states that the overpayment is final and should remain as it is until repealed, superseded or rescinded by the Secretary of State. If the defence dispute the amount of overpayment, the proper course is to appeal to a first-tier tribunal against the overpayment decision. 

As the law currently stands, however, there is no conclusive statutory provision which prevents the court from ordering a Newton Hearing where there is disagreement as to the amount attributable to the offending.  

If a Newton hearing is ordered (usually where there is a guilty plea on the facts but dispute on the amount alleged by the prosecution to be attributable to the offending) the burden will be on the prosecution to prove that the amount alleged is correct. Usually the Decision Maker will be required to attend court to explain how (s)he arrived at the adjudicated overpayment calculation. 

Possible defences and prosecution rebuttal 

Claimants often assert at interview that they thought that they could work for a given number of hours each week, or earn a specified amount of money without it affecting their entitlement to benefits. Evidence of hours/pay exceeding this self-imposed limit will often rebut this point, so will evidence demonstrating what was explained to the claimant.  

Defendants also allege that they contacted the DWP/LA/HMRC about the change in their circumstances (e.g. they wrote or telephoned the department and declared they had started work).  

In this type of case rebuttal statements should be on file setting out the procedure for dealing with reports that come into the office, indicating what happens to them and where they are likely to be recorded. It must go on to say that searches have been made in all of the places where a report could have been received and that these have proved fruitless. The matter is then a question of fact for the court to determine. 

Defence claim – summary only case brought outside the limitation period 

See limitation periods for summary offences in DWP and LA cases above. 

Delay 

Occasionally prosecutors will receive abuse of process challenges on the grounds that there has been too long a delay between the start of the criminal investigation and the time it has taken to get the case to court. See Legal Guidance chapter on abuse of process for further details. 

Delay should only amount to an abuse of process in the most exceptional circumstances and there must be “serious prejudice” to the extent that it would not be possible for the accused to have a fair trial (A-G’s Ref (No.1 of 1990) [1992] QB 630). See also Bennett v Secretary of State for Work and Pensions [2012] EWHC 371 (Admin) as an example of a benefit fraud case where delay was not fatal. 

A delay in bringing a case to court could be reflected in the sentence, however. 

No free legal advice at interview under caution 

Where the defence allege a breach of PACE Code C and a breach of the right to a fair trial, as no free legal advice was offered during the interview under caution at the benefit office (or that legal aid was not allowed), prosecutors should note that free legal advice for interviews conducted elsewhere that at a police station is only available where a police constable is present. Free legal advice should be available if the suspect is under arrest and detained at the police station.  

At the start of any interview under caution, however, interviewees should be asked whether they wish to consult with a solicitor prior to questioning. If the interviewee does wish to consult with a solicitor, they should not be interviewed or continued to be interviewed until they have had the chance to do so. If the interviewee does not wish to consult a solicitor or cannot (e.g. due to limited financial means), this should be confirmed during the interview and recorded. 

Defence challenge surveillance undertaken by Local Authority 

See DWP FES and Local Authority Investigator Powers detailed above. 

Department of Health (National Health Service (NHS)) Cases 

NHS Investigations 

NHS fraud cases were investigated by NHS Protect. NHS Protect was the operating name of the NHS Counter Fraud and Security Management Service, a division of the NHS Business Services Authority. 

The NHS Counter Fraud Authority (NHSCFA) is the new organisation tasked to lead the fight against fraud, bribery and corruption in the NHS. When the NHSCFA was launched on 01/11/2017, NHS Protect ceased to exist. 

NHSCFA investigators are regionally based and are tasked with tackling crime affecting the health service. 

The NHSCFA has responsibility for investigating cases of alleged: 

  • Bribery; 
  • Corruption; 
  • Forgery; 
  • Fraud; and 
  • Theft against the NHS. 

NHSCFA investigation powers 

  • NHS investigators do not have powers of detention, arrest, search or seizure and rely on police assistance when any of these functions are required. 
  • NHS investigators apply Code C of PACE. Suspects attend interviews under caution (IUC) voluntarily. Where there is no constable present at the interview, free legal advice is not automatically available. Suspects are informed at the beginning of the IUC that they have the right to seek legal advice and the interview may be suspended to enable them to do so. 
  • The Regulation of Investigatory Powers Act 2000 enables NHS investigators to authorise directed surveillance (but not intrusive surveillance) for the prevention or detection of crime. 
  • NHS investigators have powers under sections 2(1)(b) and 195(2) National Health Service Act 2006 (NHS Act) to prevent, detect and investigate offences and other unlawful activities carried out against the NHS. Under Part 10 NHS Act, NHS Protect investigators are authorised to serve disclosure notices requiring the production of documents against health service organisations/employees for the purposes of investigating and detecting offences.   
  • Section 204 of the NHS Act creates offences of failure to comply with a requirement to produce documents and making a false or misleading statement in purported compliance with a requirement imposed.  
  • NHS investigators cannot charge or bail suspects. Unless the police are involved in the investigation, criminal proceedings are instituted by postal charge and requisition by the CPS. Serious cases of fraud will involve NHS investigators working closely with the police. In these cases the police will charge the suspect and the prosecutor or out of hours CPS Direct will provide the police officer with legal advice on charging before or following arrest. 

Hierarchy of disposals in NHS investigated cases 

DH sanctions policy applies to NHS fraud cases investigated by NHS investigators.

NHS investigators have discretion whether: 

  • To take no action;  
  • To pursue the case by civil means only (e.g. by civil recovery or disciplinary proceedings);  
  • To offer a civil penalty (only available in prescription charge cases. See Impact of civil penalty on prescription charge prosecutions);  
  • To offer a simple caution;  
  • To refer the case to CPS for a decision on whether to prosecute. 

NHS prosecution cases 

Cases referred to the CPS for prosecution usually involve abuse of position, breach of trust or organised fraud even where the value of fraud is low.

The CPS can advise on NHS investigations in the same way as they can advise the police. 

The NHSCFA and health bodies may conduct a criminal investigation with a view to submitting a case to the CPS for a decision regarding prosecution for any number of reasons, for example: 

  • The case is serious and/or extensive; 
  • If a prosecution took place it would help to challenge beliefs about fraud, bribery and corruption and how and when they can occur; 
  • If a prosecution took place it would help to prevent or deter financial crime; or 
  • If a prosecution took place it would demonstrate to potential offenders and the public that those who commit crimes against the NHS will be held to account. 

NHSCFA prosecutions - common types of fraud 

The kind of cases investigated by the NHSCFA and referred for prosecution includes: 

  • Professionals such as pharmacists, dispensing GPs, dentists and opticians who submit false claims for payment by altering prescriptions, claiming for work not undertaken or creating “ghost patients”; 
  • NHS staff obtaining employment on the production of false documents or failing to declare previous convictions; 
  • NHS staff submitting false documents in order to claim inflated wages and other expenses (e.g. false timesheets and payroll fraud, false travelling expenses and claims for equipment never purchased); 
  • Contractors and suppliers may exaggerate or falsify records of NHS work; 
  • Patients submitting false claims for expenses or seeking medical assistance at multiple GP surgeries or hospitals using false details; 
  • Payment diversion fraud - This happens when fraudsters trick an NHS organisation into paying money to them, for example by pretending to be from one of the organisation's regular suppliers; 
  • Procurement fraud - This relates to the purchasing of goods and services by an NHS organisation. An example is bid rigging, when bidders agree between themselves to eliminate competition, denying the organisation a fair price or delivering poor quality goods or services; or 
  • Students applying for NHS bursaries using false documentation. 

NHS Specific Offence - Prescription Charge Summary Offence 

In addition to the general criminal law, Section 194 of the NHS Act 2006 (NHS Act) provides a summary only offence, punishable with a level 4 fine, in connection with prescription charges. 

Points to Prove 

  • The defendant knowingly made; or 
  • Caused or knowingly allowed another to make, a false statement or representation; or 
  • Caused or knowingly allowed another to produce any document or information, which he knew was false in a material particular; 
  • With a view to securing the evasion of the whole or part of a prescription charge/reduction remission/repayment of a prescription charge or other payment under the Act. 

Limitation periods in NHS Prescription Charge Summary Offence 

Proceedings for an offence under Section 194(2) of the NHS Act 2006 may be begun within: 

  • The period of three months beginning with the date on which evidence, sufficient in the opinion of the Secretary of State to justify a prosecution for the offence, comes to his knowledge, or 
  • The period of 12 months beginning with the commission of the offence. 

Whilst very rarely used, that decision is exercised by the NHSCFA under the Secretary of State’s delegated authority. 

Impact of Civil Penalty on Prescription Charge Prosecutions 

Where a person is convicted of a prescription/payment offence under Section 194 of the NHS Act, the defendant will not be liable to pay any penalty charge or further sum under the Act’s civil penalty regime (see Section 194(7)).  

Conversely, where a person pays a civil penalty recoverable under Section 193 of the NHS Act in respect of a prescription/payment offence that defendant must not be convicted of an offence under Section 194 in respect of the charge or payment. Thus the application of a civil penalty is a bar to prosecution (see Section 194(8)). 

Mode of trial in NHS prosecutions 

CPS guidance on mode of trial will apply where offences are charged contrary to the general criminal law.

Out of court disposals available to prosecutors in NHS investigated cases 

Given the range of out of court disposals already considered before a case is referred to the CPS to consider prosecution, prosecutors will consider advising that a caution is an appropriate disposal only in exceptional circumstances. 

When considering the Public Interest Test prosecutors should bear in mind that only the most serious cases, often involving abuse of position or breach of trust, are referred to the CPS. 

CPS guidance on the use of out of court disposals applies in all cases. 

Any decision to advise NHS investigators to offer a caution must be approved before it is communicated to the NHSCFA or to the defence. If the offer of a caution is declined by the defendant the prosecutor should reconsider prosecution in line with guidance and the Code. 

Sentencing Guidelines in NHS prosecution cases 

The majority of NHS prosecutions will be brought under the general criminal law. Where fraud is charged, the Sentencing Council’s guidelines on fraud offences will apply.  

The advocate should ensure that the court is aware of the seriousness of the breach of trust/abuse of position. 

Post-Conviction orders in NHS Prosecutions 

Financial Investigations 

The NHSCFA has its own accredited financial investigators undertaking financial investigations. Assistance is sought from Regional Asset Recovery Teams (RART) where necessary. If an ancillary order is sought there will be instructions to the advocate on the file. 

Confiscation Orders 

Applications for confiscation orders will be sought in NHS cases in accordance with usual CPS practice. Detailed instructions will be included in the file. 

Costs 

The usual CPS scales will apply to prosecution costs in NHS fraud cases.  

Where the NHSCFA and their Trusts ask the CPS to recoup the investigation costs following conviction, there will be a clear instruction on the prosecution file and a costs schedule will be included containing a detailed breakdown of the costs and the address to which investigation costs should be paid.  

Investigation costs orders and payments should not be made payable to the CPS as this will cause an accounting error. 

Compensation 

Compensation orders are regularly sought in NHS cases. Full deals of the amount of compensation to be claimed and to whom payments should be made will be included in the file.  

As with investigation costs, Compensation orders and payments should not be made payable to the CPS – incorrect orders will cause an accounting error. 

Crown Prosecution Service powers to prosecute NHS cases 

On 20/03/2012 the Attorney General assigned to the Director of Public Prosecutions the functions of advising on and the prosecution of, cases investigated by the NHS Business Services Authority and Department of Health, NHS Protect is part of the NHS Business Authority. The assignment took effect from 01/04/2012. 

Confidentiality and information sharing 

Section 201(3)(d) of the Act permits the Secretary of State for Health to disclose information for the purposes of any criminal investigation or criminal proceedings. This provision enables information to be disclosed to the Director of Public Prosecutions for the purposes set out in the assignment referred to above. Prosecutors will be mindful of patient confidentiality at all times. 

Annex A - Acronyms  

Common DWP Acronyms and abbreviations used in Welfare and Health Fraud prosecutions.  

  • AA - Attendance Allowance
  • ACT - Automated credit transfer: payment transferred directly from DWP into a bank account
  • Ad - Administrative Penalty issued under Section 115 of the Social Security Administration Act as an alternative to prosecution
  • AP - Alleged Partner
  • CA - Carer’s Allowance
  • CB - Child Benefit
  • CTB - Council Tax Benefit
  • CTC - Child Tax Credits
  • DWP - Department for Work and Pensions
  • DH - Department of Health
  • DLA - Disability Living Allowance
  • ESA - Employment Support Allowance
  • FFO - False from the outset
  • FTN - Failure to notify
  • FI - Fraud Investigator
  • FIO - Fraud Investigation Officer
  • FIS - DWP’s Fraud Investigation Service
  • HMRC - His Majesty’s Revenue and Customs
  • HB - Housing Benefit
  • IB - Incapacity Benefit
  • IS - Income Support
  • IUC - Interview Under Caution
  • JSA (CB) - Jobseeker’s Allowance – Contributory Based
  • JSA (IB) - Jobseeker’s Allowance – Income Based
  • K&CR - Know and can recognise statement
  • LA - Local Authority
  • LTHW / LTAHW - Living together as husband and wife
  • LT54 - Decision Maker’s overpayment statement of reasons document
  • ORG7 / DLOrg7 - Decision Maker’s Overpayment Recoverable Amount Notification Letter
  • PC - Pension Credit
  • PIP - Personal Independence Payment
  • Section 116 - certificate / Secretary of State certificate A certificate issued by a DWP/LA investigator certifying the date of sufficiency of evidence for the purpose of extending limitation beyond the 12 month statutory time limit under Section 116A Social Security Administration Act 1992
  • SFIS - Single Fraud Investigation Service (comprising DWP, Local Authority and HMRC fraud investigators investigating fraud against all social security benefits and tax credits)
  • SSAA - Social Security Administration Act 1992
  • SSFA - Social Security Fraud Act 2001
  • TC - Tax Credits
  • TFI - Team Fraud Investigator
  • UC - Universal Credit
  • W/C W/D or WIR - Working whilst claiming, working whilst drawing benefit or working in receipt of benefit 

Annex B 

Sentencing Council’s Guidelines and Magistrates’ Courts Sentencing Guidelines for Social Security and Tax Credit Offences can be found online. 

Annex D 

Benefit Entitlement Rules 

The DWP is responsible for investigating instances of fraud in a wide range of social security benefits. The rules and regulations governing benefit entitlements are extremely technical and complex.

The following paragraphs contain only a brief overview of the entitlement rules for some of the social security benefits that can be claimed. Further information on the entitlement rules can be found on the Department for Work and Pensions’ online guidance – https://www.gov.uk/browse/benefits. 

Attendance Allowance  

Attendance Allowance (AA) is paid to people who are physically or mentally disabled, State Pension age or older and have attention or supervision requirements.  

There is a higher rate and a lower rate, the rules of which are similar to those for the highest and middle rates of Disability Living Allowance (DLA) – care components.  

Carer’s Allowance (CA) 

Carer’s Allowance (CA) is paid to people who are providing care to another person who is in receipt of certain benefits (e.g. DLA, PIP, AA etc) for 35 hours or more a week.  

The claimant must: 

  • Be 16 or over; 
  • Spend at least 35 hours a week caring for someone; 
  • Not be in full-time education; 
  • Not be studying for 21 hours a week or more; 
  • Not be subject to immigration control; 
  • Has an income less than £123 a week after tax, national insurance and expenses. 

Council Tax Benefit (CTB) 

Council Tax Benefit was means tested and paid to people on low income and who are liable to pay council tax.  

CTB was paid to people who are in paid employment as well as people who are receiving social security benefits or tax credits.  

People who are in receipt of means-tested benefits (e.g. Income Support) had an automatic passport to receive the maximum award of CTB.  

Section 33 of the Welfare Reform Act 2012 abolished Council Tax Benefit and commenced on 01/04/2013 by Article 8 of the Order. Article 9 of that Order makes savings provisions preserving the ability to exercise powers for the purpose of investigating and prosecuting CTB after that date. 

Council Tax Reduction Schemes  

Section 33 of the Welfare Reform Act provided for the abolition of CTB. Following the abolition of Council Tax Benefit local rebate schemes called Council Tax Reduction Schemes have been operated by local authorities since April 2013.

Pensioners remain entitled to rebates in accordance with national rules on a similar basis to CTB and local authorities (LAs) have discretion on how to provide help for working age people. Local Government Finance Act 2012 placed a new responsibility on Local Authorities to devise their own local reduction schemes for the year 2013-2014 onwards. Local authorities in England will have discretion to devise their own schemes whilst an universal scheme will be applied in Local Authorities in Wales.   

Disability Living Allowance  

 Disability Living Allowance (DLA) can be claimed by people who are under 65 years of age. DLA comprises of a care component and a mobility component. The care component can be claimed in addition to the mobility component if people satisfy the “disability conditions” for either the lowest rate, middle rate, higher rate of the care component or are terminally ill.    

The DLA mobility component is awarded to people who have difficulties with walking. The mobility component can be awarded at a higher or a lower rate. 

The higher rate mobility component is paid to people who:  

  • Have a disability that means they are unable, or virtually unable to walk; or 
  • Are both deaf and blind; or  
  • Were born without feet, are a double amputee or otherwise are without legs; or 
  • Are severely mentally impaired, have severe behavioural problems, and qualify for the highest rate of the DLA care component. 

The lower rate mobility component is paid to people who, although they are able to walk, are so severely disabled, physically or mentally, that, ignoring any ability to use familiar routes, are unable to take advantage of walking outdoors without guidance or help from another person for most of the time. 

The DLA care component is awarded to people who have attention or supervision needs. The care component can be awarded at lower, middle or higher rates. The rate of the care component is determined by the severity of a person’s disability and the level of care that is required. 

Disability Living Allowance (DLA) is being replaced by Personal Independence Payment (PIP) for disabled people. 

Employment and Support Allowance 

Employment and Support Allowance (ESA) was introduced on 27/10/2008. ESA is awarded to people who have a limited capacity to undertake employment (e.g. it is unreasonable to require people to undertake work because of illness or disability) and who are not entitled to statutory sick pay (SSP).  

ESA replaced Incapacity Benefit (IB) and Income Support (IS) on the grounds of being incapable of working.

Contributory ESA is paid to people who satisfy the national insurance contribution conditions and who do not have to pass a means-test (although some earnings-related income can reduce the amount paid). 

Income-related ESA is paid to people if they have passed the means-test but who do not satisfy the national insurance contribution conditions. 

The basic rule of entitlement to ESA is that a person must be assessed as having “limited capability for work”. This means that because of a mental or physical condition, it is unreasonable to require a person to undertake work. 

A “work capability assessment” determines whether a person can claim ESA. The assessment determines whether a person has a limited capability to undertake some form of work. People claiming ESA may be required to provide information from their doctor as well as completing a questionnaire to complete. In most cases people are required to attend a medical examination with a doctor or other approved medical practitioner from the DWP Medical Services. 

Housing Benefit 

Housing Benefit (HB) is paid to people on low income and who are liable to pay rent to a public or private landlord. 

Similar to CTB, HB can be paid to people who are in paid employment as well as people who are in receipt of social security benefits and tax credits. 

People who are in receipt of means-tested benefits are automatically entitled to claim HB. 

Incapacity Benefit  

Incapacity Benefit (IB) was replaced by ESA in October 2008 (see above), however, people in receipt of IB prior to and after this date remain entitled to IB for as long as they satisfy the qualifying conditions for the award.  

A person has to satisfy the national insurance contribution conditions to be paid IB unless they have become incapable of work in youth. IB is not means tested (although some earnings related income can reduce the amount paid). 

To qualify for IB a person must be assessed as being “incapable of work” and not entitled to Statutory Sick Pay. 

The incapability of work rules are both long and complex and fall outside the scope of this document. 

Income Support (IS) 

Income Support (IS) is a means-tested benefit and is paid to people on the grounds of low income. Those otherwise disqualified from receiving other benefits (e.g. as a result of convictions for benefit fraud) can qualify. 

IS can be paid in addition to other benefits to top up income to a certain level. After serving a specified waiting period mortgage payments and other housing costs can be met in a claim for IS. 

The following people may be entitled to claim IS: 

  • People who work less than 16 hours a week and have a low income; 
  • People who are not in full-time study (but there are exceptions); 
  • People who are studying part-time and are not on a full-time course and who satisfy the other rules for claiming IS; 
  • People who do not receive JSA or ESA; 
  • People who have low income and are a lone parent; 
  • People who have a low income and are a carer; 
  • People who have a low income and receive Pension Credit; 
  • And for all of the above, there is a savings limit’ currently at £16,000. 

Jobseeker’s Allowance (JSA) 

Jobseeker’s Allowance (JSA) is paid to people who are unemployed and who are available for and are actively seeking work. 

To receive JSA a person must have a current jobseeker’s agreement with the Jobcentre Plus office. The jobseeker’s agreement will usually contain a requirement for the jobseeker to “sign-on” once a fortnight at their local Jobcentre plus office. 

There are two awards of JSA: 

  • Contribution-based JSA is paid for 26 weeks to people who have satisfied specified national insurance contribution conditions. It is not means-tested but some earnings-related income can reduce the amount that is paid.  
  • Income-based JSA is means-tested and non-contributory and is paid for as long as the person satisfies the conditions of entitlement. Income-based JSA can be paid “on-top” of contribution-based JSA if the person has additional needs such has disability or mortgage payments. 

People cannot usually receive JSA if they are in full-time paid employment. Income based JSA is not payable if the claimant or their partner are in full-time work. If the JSA claimant is working they are not permitted to work for more than 16 hours or more each week. If they are claiming for a partner the partner must not work more than 24 hours or more each week.  

Pension Credit (PC) 

Pension Credit (PC) is paid to people aged over 60 years of age and is awarded to ensure that pensioners have a guaranteed level of income above the basic state pension.  

PC consists of two elements:  

  • Guarantee credit; and  
  • Savings credit  

The guarantee credit element is paid to people who have reached the qualifying age, satisfy the “habitual residence test” and have no income or their income is below the appropriate minimum guarantee.  

The savings credit element is paid to people who are 65 years of age or more, satisfy the “habitual residence test” and have a qualifying income that exceeds the “savings credit threshold” but is not so high that it will produce a nil award. 

PC is administered by the Pension Service, an executive agency of the DWP. 

Personal Independence Payment 

From 8 April 2013 a new benefit called Personal Independence Payment (PIP) was introduced and replaced Disability Living Allowance (DLA) for disabled people between 16 and 64 years of age.  

Social Fund – Regulated Social Fund  

Payments can be made to people from the Regulated Social Fund (RSF) in the form of:  

Payments from the RSF are based on people satisfying the qualifying rules which are laid down in regulations. RSFs are not budget-limited. 

Welfare reform – abolition of Community Care grant and Crisis Loans 

Changes contained in the Welfare Reform Act 2012 mean that certain elements of the discretionary Social Fund scheme were abolished in April 2013. New locally based provision will be delivered by local authorities in England and devolved to the Governments of Scotland and Wales. 

Community Care Grants and Crisis Loans 

Community Care Grants and Crisis Loans for general living expenses (including rent in advance) were abolished from April 2013. New local provision will be administered by local authorities in England and the devolved administrations in Scotland and Wales. 

Crisis Loan Alignment Payments  

From April 2013 Crisis Loan alignment payments and other Crisis Loans paid due to issues with benefit will be replaced by a new national scheme of Short Term Advances. This will be administered by the Department for Work and Pensions. 

Budgeting Loans  

Budgeting Loans will continue to be available until Universal Credit is fully rolled out. As people migrate across to Universal Credit they will have access to a new system of Budgeting Advances that will replace Budgeting Loans for Universal Credit recipients. 

Tax Credits  

There are two kinds of tax credit; they are, Child Tax Credit (CTC) and Working Tax Credit (WTC). Tax credits are administered by Her Majesty’s Revenue and Customs. With effect from 6 June 2012 tax credits fraud will be investigated by DWP or jointly by DWP and HMRC. 

CTC is paid to families with children. It is paid to people whether or not they are in full-time employment. CTC does not count as income for Income Support, Income-based JSA, Income-related ESA or PC purposes and can be paid in addition to those benefits.

WTC is paid to people on low earnings and is paid to top-up earnings. 

To qualify for WTC a person or their partner must be responsible for a child and work at least 16 hours a week. 

Other Benefits 

More detail on other benefits available can also be found online. 

Universal Credit 

April 2013 – launch of Universal Credit pathfinder  

Starting in April 2013, DWP, with its delivery partners in HMRC and local authorities, introduced Universal Credit to claimants within certain areas as a pathfinder stage. 

Universal Credit (UC) is a new benefit introduced by the Welfare Reform Act 2012; it will eventually replace and simplify current means-tested benefit and tax credits system for working-age people.  

UC will replace the following benefits:  

  • income support;
  • income-based jobseeker’s allowance;
  • income-related employment and support allowance;
  • housing benefit;
  • council tax benefit; 
  • child tax credit and working tax credit; 
  • crisis loans and community care grants – responsibility for an equivalent will be passed to local authorities or devolved governments; 
  • budgeting loans – to be replaced by payments on account (an advance of universal credit) in cases of need. 

The main differences between Universal Credit and the current welfare system are: 

  • Universal Credit will be available to people who are in work and on a low income, as well as to those who are out of work; 
  • most people will apply online and manage their claim through an online account  
  • Universal Credit will be responsive, as people on low incomes move in and out of work, they will get ongoing support; 
  • most claimants on low incomes will still be paid Universal Credit when they first start a new job or increase their part-time hours; 
  • claimants will receive just one monthly payment, paid into a bank account in the same way as a monthly salary; 
  • support with housing costs will go direct to the claimant as part of their monthly payment. 

Further information on Universal Credit can be found online.

 

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