Defending Welfare Benefit Fraud - the benefit of the doubt
In my first article in this area, published in December 2009, I
highlighted the problems facing those under investigation and
prosecution for benefit fraud. I suggested that as public money
became tight the pressure on government agencies to recoup would
increase. As we now have a new government committed to cutting all
public spending and benefits in particular, recoupment of
incorrectly paid benefit will be a priority.
Yet as the recession bites and redundancies increase more people
will be forced to claim state benefit. What happens then when you
recall that many years ago you wisely took out an income
replacement policy which pays out in the event of ill health or
redundancy? Do you have to declare this to the Benefits
Agency or Local Authority looking after Housing Benefit and Council
Tax Benefit. The Agencies would argue quite properly that they
should know about this if you are in receipt of such a replacement
income. However, for some, at a time of great stress daunted by a
visit to the Benefits Agency many for the first time in their
lives, it may not be entirely clear from the claim form that such a
payment should be declared.
The claim form for Income Support is staggeringly over 40 pages
long. There are various questions asked regarding payments made on
redundancy, these are in the section entitled "About savings and
property" Other questions regarding insurance payments for
loans/mortgages in the event of redundancy and ill health are asked
under the "Owning your own home" section. Whilst there is no
question specifically about income replacement policies, applicants
should beware that there is a general sweeper up question asked
inviting you to tell the Agency about any other money you may have
coming in. The Housing Benefit application forms issued by
local authorities are different but seek to ascertain similar
income information.
So what if you forget about the payments and fail to declare
them? The chances are that you find yourself prosecuted for
benefit fraud. Benefit they may deal in but the benefit of the
doubt is a rare sight when it comes to prosecution decisions in
this area.
What if you are charged with an offence under s111A of the
Social Security Administration Act 1982 will you have to plead
guilty just because you failed to declare that income replacement
policy? This needs careful consideration as you may not in fact be
guilty. If the Prosecution cannot prove to the high standard that
they must, that you have been dishonest in your failure to declare
then you are not guilty. It is insufficient for the Prosecution to
show that any reasonable person would have known to declare the
money. The Prosecution must prove subjective dishonesty that is to
say that the particular person himself/herself must be shown to
have known at the relevant time that the failure to disclose was
material and dishonest. It may well be that the person at all
relevant times was genuinely confused or was suffering with a
mental illness which caused them to be unable to appreciate what
was required of them. In these cases, marshalling the medical
evidence will be critical in avoiding a criminal conviction for
dishonesty.
The ultimate irony is that such a conviction would, of course,
have a long term adverse effect upon the ability of such a person
to regain employment and cease being a burden on the state.
So, money paid out where full disclosure was not made may
well need to be repaid but a conviction may be avoidable.
Gary Lesin-Davis
EAD Solicitors LLP