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Watchdog hits out as housing benefit fraud increases by 50%

Auditor General says level of cheating ‘unacceptable’ after £2.4m is claimed illegally


Auditor General Kieran Donnelly

Auditor General Kieran Donnelly

Auditor General Kieran Donnelly

The amount of housing benefit fraud in Northern Ireland has risen by over 50%, the latest report from Land and Property Services (LPS) has revealed.

The figures show the total amount of benefit claimed fraudulently in 2019/20 rose to £2.4m, compared to £1.6m the previous year.

But the overall level of fraud and error in LPS accounts has decreased slightly.

The audit of accounts revealed LPS administered £37m of housing benefit to claimants who own their home but who are on low income and suffering financial hardship.

The levels of fraud and error, which are estimated by the Department for Communities' standards assurance unit, amounted to £3.9m, representing 10.6% of total housing benefit expenditure.

While this is a 2.5% decrease compared to the 13.1% recorded in 2018-19, there were concerns at the notable increase in levels of fraud.

Comptroller and Auditor General Kieran Donnelly said the levels of housing benefit fraud and error remained "unacceptably high".

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"While I welcome the considerable efforts LPS has made to improve fraud and error rates, the increase in customer fraud by 50% in 2019 is concerning," he said.

"The significant levels of fraud and error in LPS total housing benefit expenditure remain unacceptable, and the qualification of my audit opinion reflects that."

In 2019-20 LPS administered £3.3m of rate rebate, which is reflected in these financial statements, for claimants in receipt of Universal Credit.

LPS estimated the amount of fraud in error within these transactions to be 7.2% of LPS total rate rebate expenditure.

Mr Donnelly said he will keep this matter under consideration in light of increased numbers of claimants becoming eligible for the rate rebate scheme in the future.

This increase is anticipated as a result of claimants due to migrate to Universal Credit from other benefit types, as well as new Universal Credit claimants, particularly due to the impact of Covid-19.

The report also showed levels of ratepayer debt were £124.4m at March 31, 2020, slightly reduced from the 2019 figure of £124.5m.

Some £14.5m of debt was written off during the year and £38.3m was identified as impaired debt, which is unlikely to be repaid in full.

However, LPS has advised that the majority of outstanding debt is due to be recovered, and Mr Donnelly stressed the importance of ensuring all necessary steps were taken to maximise this recovery.

The amount of housing benefit paid out by LPS has steadily fallen over the past five years, from £41.5m in 2015 to £37m in 2019.

The figure for fraud in 2019 includes an internal fraud case related to the misappropriation of refunds on customer accounts.

Approximately 2,000 refunds a staff member was involved in approving over a 12-year period were investigated.

LPS identified the suspected misappropriation of 56 refunds by the staff member to a total value of £125,000.

The staff member was dismissed in October 2019 and LPS is exploring further possible fraudulent activity by the same person.

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