Guidance

Statistical notice: changes in the fraud and error in the benefit system: financial year 2021 to 2022 estimates

Published 13 May 2022

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This publication is available at https://www.gov.uk/government/publications/changes-in-the-fraud-and-error-in-the-benefit-system-financial-year-2021-to-2022-estimates-statistical-notice/statistical-notice-changes-in-the-fraud-and-error-in-the-benefit-system-financial-year-2021-to-2022-estimates

Introduction

This statistical notice is to provide advance notice of a revision to the fraud and error in the benefit system publication.

We are making a revision related to Housing Benefit (HB) expenditure as quality assurance of our statistics has resulted in an error being identified in Housing Benefit expenditure figures, whereby Universal Credit (UC) has been incorrectly treated as a non-passported benefit for HB. This error has become apparent as there are now more claimants receiving HB due to being in receipt of UC.

This revision will be made in the financial year ending (FYE) 2022 publication, due to be published on 26 May 2022.

Revised figures for FYE 2020 and FYE 2021 using the revised methodology will also be published within the ‘Fraud and error in the benefit system: FYE 2022’ estimates. This will allow a like-for-like comparison with the newly published figures for FYE 2022.

Due to the amount of resource required to apply the methodology changes to all historic data, we are unable to provide an updated back series prior to FYE 2020.

Further detail on this change will be presented in the background information and methodology note that will accompany the Fraud and error in the benefit system: FYE 2022 estimates.

If you have any queries on these changes please send them to: [email protected]

Background

The Department for Work and Pensions (DWP) uses a complex methodology to measure the levels of fraud and error in the benefit system. Read more information on the methodology used.

In order to calculate the monetary value of fraud and error and the proportion of expenditure overpaid we use DWP expenditure figures. Within these figures UC was not classed as a passporting benefit for HB. We have now made adjustments to the expenditure to correctly categorise UC as a passporting benefit.

This change effects the HB total and also the working age HB figures. Pension age HB figures are unaffected due to UC being a working age benefit.

Effect

Adopting the change to HB expenditure results in small changes in overpayments and underpayments at a global (overall) level. For HB there is a slightly larger change.

Due to the roll out of UC and the jump in UC claims because of COVID-19, the impact of this change increased over time. This change reduces both the HB total overpayments and underpayments figure for FYE 2020 and further reduces both of these figures in FYE 2021. This means that the trend over the last two years is now decreasing rather than being stable. Prior to FYE 2020, we estimate the impact on the HB total figures would have been negligible and would not impact on the trend.

Other changes

We are making a number of other smaller changes as part of our regular review of our methodology for consistency and accuracy purposes. These are as follows.

  • change to use the monetary difference between a Housing Benefit claimant’s award before the benefit review and the claimant’s award after the review; to capture the effect of multiple errors more accurately
  • change to remove the extra extrapolation factors on Housing Benefit, Pension Credit and Employment and Support Allowance
  • change to how we attribute the amount overpaid or underpaid to error reasons on Housing Benefit, Employment Support Allowance and Pension Credit, to align with Universal Credit and State Pension

These other changes all have a negligible impact on the overpayments and underpayments at a global (overall) level and a small impact at a benefit level.

The revised figures for FYE 2020 and FYE 2021 in the fraud and error in the benefit system: FYE 2022 estimates (due to be published on 26 May 2022) will also include these changes. This will allow a like-for-like comparison with the newly published figures for FYE 2022.

More information can be found in the background information and methodology document (for 2021 to 2022) when this is published (alongside the statistics) on 26 May 2022.

Issued by

Fraud and error measurement and analysis team, DWP

Press Office: 0115 965 8781

Statistician: John Bilverstone

Fraud and error measurement and analysis team
Department for Work and Pensions
Benton Park View
Benton Park Road
Newcastle upon Tyne
NE98 1YX

Email: [email protected]

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