According to some survey results it is popularly believed that more than a third of all benefit claims are fraudulent.
They aren't. The best, official, estimate is:
As Unite, who prepared the graphic, say:
Obviously fraud is wrong, but many people seem to think lots of people claiming benefits do so illegally.
When the TUC did a poll on this people thought that 37% of welfare was claimed fraudulently. The facts couldn't be more different.
Just 0.7% of the welfare budget is claimed fraudulently
…but at the same time up to 24% (£11.77bn) of befits go unclaimed.
Compare this to the total amount lost through tax evasion and avoidance…
The taxman estimates the gap between what the government thinks it should receive in tax versus what it actually gets is over £30bn a year.
My own estimate of the tax gap is, of course, much higher.
It's taken a lot of effort to persuade the world that the tax gap is a massive issue.
Now it's time that they realised that benefit fraud is not a big deal. In fact, a system with only 0.7% fraud within it is phenomenally good. It could be better, and miracles do happen, but in terms of reward for effort let's be clear, tackling tax evasion is much more important.
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Um, surely it’s impossible to know how much is claimed fraudulently, as fraudsters getting away with it are not going to be captured in the statistics.
Sampling can work – and well for beenfits, since the sampling population can be easily defined as benefits paid
It does not work well for tax as the sample population includes undeclared income – and there the sample base HMRC uses is simply inherently flawed as a result as it excludes all completely non-declared income and only includes partially declared income
The focus on benefit fraud as opposed to tax fraud and avoidance much like the focus on public debt rather than private debt is a distraction technique by those pulling the strings in this country.
Heaven forbid we should tackle the real issues that blight the UK! How about starting with this list:-
Rising unemployment.
Good jobs being replaced by temporary low paid ones.
A flatlining economy.
Banks too big to fail run my banksters to big to jail.
Crony capitalism.
The rising income/wealth inequality gap.
The rising number of food banks.
A shortage of homes
Of course the above is not comprehensive but I can not but wonder whether they are all facets of Dave’s “Big Society”?
On the subject of food banks, here’s an article in the FT
http://www.ft.com/cms/s/0/aa02aeee-ab53-11e2-ac71-00144feabdc0.html#slide0
Oliver de Schutter’s comments are very telling about food bank charities…so there we have it…. are we to infer that “Big Society” is nothing but a euphemism for the destruction of the UK’s welfare state?
It is worth noting that, in the recent churches report http://www.jointpublicissues.org.uk/truthandliesaboutpoverty/ it is estimated that there is some £180 million pounds UNDERCLAIMED (hope I’ve remembered the figure correctly). It is interesting how biased reporting can create a distortion of such massive proportions -but not surprising.
Richard,
Lazy question:
What proportion of the total corporation tax bill is £30bn or your higher estimate?
(to compare with 0.7%)
Their figure is 6.2% of tax – the best gap in the world
Mine is much higher – 17% – and more realistic as a result
My evasion gap at 13.4% is about what they estimated for VAT for many years
Benefit fraud has been extensively studied, and the material is much more rigorous than anything relating to tax. There are summary figures on the causes of fraud and error in the benefits system at http://statistics.dwp.gov.uk/asd/asd2/fem/fem_1112.pdf .
The first point to understand about the figures is that about two-thirds of DWP expenditure goes to pensioners. The second issue concerns mechanisms: contributory age-related benefits, which are far less prone to error or fraud than complex, conditional benefits. Pension Credit, which is means-tested, has estimated fraud of 1.6%; Retirement Pension, which is contributory, is estimated at 0.1%. Third, there are greater problems attributable to error than to fraud as such. Further information is available at http://paulspicker.wordpress.com/?s=fraud .
Thanks
Richard
Sadly, I do think that all too many people WANT to believe this crap because it gives them a sense of smug superiority.
This does not show that most benefit claims are from people who are in work, not out of work – those on chronically low wages. Quite a small portion of the welfare budget goes on the unenployed.
Incidently, I thought the figure for unclaimed benefits was far higher – around £17.5 billion?