£650 million overpaid in housing benefit
New figures from the Department of Work and Pensions (DWP) and National Statistics suggest that £650 million of public money was overpaid on housing benefit for the 12 month period up to September 2003.
This amounts to around 5.3 per cent of the overall expenditure on housing benefit.
Due to the statistical extrapolation the DWP notes that the real figure could be up to £100 million either way.
The money was lost from the public purse through a combination of fraud and error, with fraud believed to make up around half the total.
The exact extent of fraud depends on how much of the overpayments, due to non-residency, was due to fraud. The other half, ascribed to error, is made up by inaccuracies in the means testing process.
However, the DWP says there is “not enough evidence” to decide whether levels of fraud and error are going up or down.
In comparison, figures published in March on the level of fraud and error in Jobseeker’s Allowance found that 6.4 per cent of the budget was overpaid, equivalent to £1.09 billion annually.
Unlike housing benefit, the DWP has a specific target to reduce fraud in the unemployment benefit system by 50 per cent by March 2006.
