How Britain’s ‘revolutionary’ benefit left taxpayers with an £11bn fraud bill

The DWP’s report said: “Claimants are required to declare evidence to the Universal Credit service and are directed to keep the evidence. 

“The Department accepts [declaration of evidence] this without directly inspecting the evidence, and will advise the claimant if they need to see it at a later date.”

The rule change has coincided with a record leap in people claiming Universal Credit for sickness. Two million people are receiving Universal Credit as a health benefit, up 400,000 in a year and almost 70pc of them are considered unfit for work.

In 2021, the DWP began reviewing two million cases where Universal Credit was paid out under the eased vetting process and said it had made around £500 million savings within the first year of the retrospective checks.

The DWP said it accepts that “certain people exploited” the relaxed system during the pandemic. 

Its most recent statement of accounts said: “When Covid-19 first broke in March 2020, DWP suspended certain control measures in order to prioritise paying people who needed support and keep them safe. However, certain people exploited this and we worked hard to reinstate our normal checks and balances at the earliest opportunity.”

‘The losses run to billions of pounds a year’

Universal Credit was designed to bring a medley of welfare state payments under one umbrella. It is replacing the Child Tax Credit, Housing Benefit and Jobseeker’s Allowance, as well as several other schemes.

It gives payments to households based on their financial circumstances from month to month, which are assessed on a rolling basis. Having savings of over £16,000 makes a claimant ineligible for the benefit.

However, civil servants must make a request to individually check each benefit claimant’s bank account they suspect of fraud. Given that around one in 10 universal payments are generally regarded by the DWP to be fraudulent, this leaves them with a huge workload.