Around one million universal credit claims are being re-examined for fraud after benefit overpayments nearly doubled during the pandemic.
Fraud and error in the benefits system reached a record high in the last financial year as normal verification checks were suspended in order to cope with a massive influx of new claimants.
An estimated £8.4bn was made in overpayments, with around £6bn of that down to universal credit, according to official figures released on Thursday.
The Department for Work and Pensions (DWP) insisted levels of fraud and error remained low, with 95 per cent of claims paid correctly.
As coronavirus hit the UK last spring, the surge in demand for universal credit led the government to relax some verification rules. For example, a claimants’ cost of rent was accepted on trust.
The DWP said it kept note of claims considered suspicious, around one in six, and was now looking back over them.
Neil Couling, who is in charge of the programme, said some claimants were likely to get a “tap on the shoulder”.
The amount spent on universal credit more than doubled to £38.2bn last year after the DWP was met with an additional 3 million claims when Covid hit. Universal credit now accounts for 18 per cent of total benefits spending, up from around 10 per cent in the previous financial year.
Slightly more than half of the total overpayments in the benefits system last year were for universal credit. Of the £8.4bn total estimated to have been overpaid, the DWP was able to recover £800m. This took the net loss from overpayments to £7.6bn, or 3.6 per cent of expenditure.
The DWP also released figures showing underpayments amounting to £2.5bn, or 1.2 per cent of total expenditure.
The department also claimed to have stopped £1.7bn from being taken in a “targeted attack” on the benefits system by organised criminals.
A DWP spokesperson said: “Following an unprecedented year in which the number of universal credit claimants doubled as a result of the pandemic, fraud and error in the benefits system remains low, with 95 per cent of benefits worth more than £200bn paid correctly.
“We take any abuse of taxpayers' money very seriously and those who claim benefits they are not entitled to will face criminal prosecution.
“We also have robust plans in place to recover fraudulent claims and drive fraud and error down to the lowest feasible level.”
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