More than 2 percent of total benefit expenditure was overpaid due to fraud and error in the 2011/2012 tax year, according to figures from the Department for Work and Pensions. This cost the UK taxpayer £3.4 billion. If you're caught fiddling the benefits system, you can expect to be punished.
You'll almost always be asked to repay the money you've stolen if you're caught claiming more than you're entitled to, whether you've been greedy with your housing benefit, tax credits, unemployment allowance, incapacity benefit or pension credits. Theoretically, you could have your assets seized under the Proceeds of Crime Act if you're convicted of benefit fraud in court, but it's much more likely you'll be required to pay back what you've conned out of the system in installments. If you derive the majority of your income from state benefits, the amount you'll be asked to repay will typically be low, no matter how much you've nicked, as the courts can't leave you without enough money to live on.
Loss of benefits and fines
The Welfare Reform Act 2012 gave fraud investigators extended powers to stop the benefits of light-fingered claimants. Offences that result in a conviction could see guilty parties losing their money for 13 weeks after a first offence, 26 weeks after a second and a massive 3 years after a third. The Conservative and Liberal Democrat-backed act also gave authorities the power to fine benefit cheats up to £2,000, with a minimum penalty of £350 without having to take them to court.
In England and Wales, the DWP's Prosecution Division decides whether fraud cases are suitable to proceed to court. In Northern Ireland, cases are referred to court by the Public Prosecution Service, whilst in Scotland cases thought suitable for prosecution go to the Procurator Fiscal. Benefit fraud cases typically make it to court when large amounts of money have been stolen or where prosecutors can establish that action is in the public interest. Most cases are heard by magistrates, but more serious cases are often referred to crown court. If you're convicted of benefit fraud, your case could end up in local and national media.
A court conviction for benefit fraud could see you sentenced to 10 years in prison, according to the Crown Prosecution Service. Sentences as harsh as this are rare though. In January 2013, a Chichester woman got away with a 12-month prison sentence, suspended for two years, and 180 hours of unpaid community work after being found guilty of defrauding £82,015.75 from the DWP. Benefit fraudsters whose offences were carried out over a long period of time or involved the forgery of official documents are more likely to face harsher sentences.