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Original poster

Universal credit fraud?

48 replies

Grandadwasthatyou · 05/08/2021 21:01

My ex Dh and I split approx 18 months ago and he received over £20k from me as part of our settlement.
He was unable to get a job during Covid and went onto universal credit living in rented accommodation.

He has now had a phone call from the compliance team at the DWP to say they have been informed he had this amount of money in the bank and did not declare it so has been receiving the full entitlement of universal credit as a single person, rent paid for, reduced council tax etc.

He has admitted on the phone that he did indeed have this amount in the bank and now has to provide bank statements etc. He must have been mad to think they would never find out. What is the worst case scenario?

I know I shouldn't be bothered as it is entirely his fault but I am worried about the implications on our young dc.
Does anybody have knowledge in this field and know how much they will ask him to pay back plus a fine?

Will they give him an allowance that he had to pay £6k straight out to pay a years rent in advance ?
Worse case scenario could he go to prison?

OP posts:
Galassia · 05/08/2021 21:03

I thought people were allowed to have x amount of savings?

Galassia · 05/08/2021 21:05

www.turn2us.org.uk/Benefit-guides/Universal-Credit-income-and-capital/Capital-Savings

They probably ask him to pay back any overpayment. I wouldn’t worry too much as it’s not that much money and could be seen as an oversight compared to some that are deliberately lying and raking in thousands regularly.

Viviennemary · 05/08/2021 21:06

I very much doubt he will go to prison. I suppose he could say it wasn't savings but he was intending it for a deposit on a house. Even though he decided to rent after all.

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Benefits
Suzi888 · 05/08/2021 21:11

Used to assess benefit, council and DWP.
He won’t go to prison.
He is allowed to have £16k and claim benefits.
His benefit will be cancelled back to the date he had the settlement.
They may allow rent in advance, but if he could afford rent why was he claiming benefit for housing costs (if he was). - Will be what they say.
They’ll accept withdrawals for furniture/decorating.
Once capital falls to 16k he can reclaim and they’ll make deductions/claw backs from any benefit.
He can make an “offer” to repay the benefit - whatever he can afford.

ThreeWitches · 05/08/2021 21:12

@Galassia

I thought people were allowed to have x amount of savings?
You used to be able to have as much in savings as you want with the old system, but now it's only 16k.

He won't go to prison, OP.

theonewhereshegotdrunk · 05/08/2021 21:17

I work in a different benefit dept but same rules likely apply as it's an income based benefit.

He'll likely have a deduction from his payments to pay off his overpayment so wouldn't have to pay it back directly unless he chose to do so, usually any overpayments are send to the debt management team where the amount of the deductions are agreed upon but this can be contested by your ex if he will struggle to live off the payments minus the deductions.

With the benefit I deal with you are allowed £10k in savings which is completely disregarded then for every £500 over £10k it's £1 less per week in payments, I would imagine it's similar with UC but can't be sure.

He won't be sent to prison though they could disallow the claim if they prove the claim was made fraudulently and he was intentionally deceptive.

The only fine he would have to pay is a civil penalty of £50 at least that's the rules under pension credit (the benefit I work on which is pensioner's version of UC) and this is often written off if the person appeals or can prove that the error was a mistake.

Babyroobs · 05/08/2021 21:17

Well if he had savings over 16k all the time he had his Uc claim he is going to owe the whole lot back. If at any point his savings fell below 16 k then his Uc entitlement would reduce by £4.35 for every £250 he had over 6k. What on earth was he thinking of by not declaring it.

Babyroobs · 05/08/2021 21:18

@theonewhereshegotdrunk

I work in a different benefit dept but same rules likely apply as it's an income based benefit.

He'll likely have a deduction from his payments to pay off his overpayment so wouldn't have to pay it back directly unless he chose to do so, usually any overpayments are send to the debt management team where the amount of the deductions are agreed upon but this can be contested by your ex if he will struggle to live off the payments minus the deductions.

With the benefit I deal with you are allowed £10k in savings which is completely disregarded then for every £500 over £10k it's £1 less per week in payments, I would imagine it's similar with UC but can't be sure.

He won't be sent to prison though they could disallow the claim if they prove the claim was made fraudulently and he was intentionally deceptive.

The only fine he would have to pay is a civil penalty of £50 at least that's the rules under pension credit (the benefit I work on which is pensioner's version of UC) and this is often written off if the person appeals or can prove that the error was a mistake.

Completely different rules for UC.
Babyroobs · 05/08/2021 21:21

@Galassia

www.turn2us.org.uk/Benefit-guides/Universal-Credit-income-and-capital/Capital-Savings

They probably ask him to pay back any overpayment. I wouldn’t worry too much as it’s not that much money and could be seen as an oversight compared to some that are deliberately lying and raking in thousands regularly.

Not that much money ? I guess that depends how much rent element he was getting plus standard allowance which has been increased during covid. Could be £800/ £900 a month in total which if this fraud has been going on for 18 months is a lot of money to pay back.
Original poster
Grandadwasthatyou · 05/08/2021 21:25

@Babyroobs .. even though he had paid his rent up front he was still receiving about £450 a month towards it plus I think whatever a single person is allowed. Plus paying only about £10 per month council tax. Will DWP inform council tax department as well?

OP posts:
Babyroobs · 05/08/2021 21:27

[quote Grandadwasthatyou]@Babyroobs .. even though he had paid his rent up front he was still receiving about £450 a month towards it plus I think whatever a single person is allowed. Plus paying only about £10 per month council tax. Will DWP inform council tax department as well?[/quote]
Yes . So he was committing council tax fraud too ? So if he was receiving £450 rent element and standard over 25 single element of £411.15 per month, that is around £861 per month x however many months the fraud was going on for.
paying upfront will not affect it - he had the money ( £20k ) to pay his rent up front !

Babyroobs · 05/08/2021 21:29

How can he have claimed Council tax support too ? the rules are very very clear that he could not get council tax support with savings over 6k, although each council has different rules I believe.

Babyroobs · 05/08/2021 21:30

I help people to make claims for these two benefits every week and the rules are very clear.

Original poster
Grandadwasthatyou · 05/08/2021 21:30

@Galassia .. but it wasn't an oversight. I know for a fact when he applied he will have been asked if he had savings over £6k and he will have lied and said no. So basically if he has been receiving let's say £1000 every month for 18 months that is a lot of money when really he wouldn't have been entitled to claim and would have been expected to live off these savings until they dropped to under £16k

OP posts:
Original poster
Grandadwasthatyou · 05/08/2021 21:32

@Babyroobs .. because he has lied and thought he would never be found out!

OP posts:
Babyroobs · 05/08/2021 21:32

[quote Grandadwasthatyou]@Galassia .. but it wasn't an oversight. I know for a fact when he applied he will have been asked if he had savings over £6k and he will have lied and said no. So basically if he has been receiving let's say £1000 every month for 18 months that is a lot of money when really he wouldn't have been entitled to claim and would have been expected to live off these savings until they dropped to under £16k[/quote]
I see it all the time. People who think they'll just give the money to a relative for safe keeping, people who didn't think they needed to declare the equity in their second home ! People who think their 20k in premium bonds don't count.

Babyroobs · 05/08/2021 21:33

[quote Grandadwasthatyou]@Babyroobs .. because he has lied and thought he would never be found out![/quote]
Well that's just stupidity. I think solicitors may have to tell the DWP of divorce proceeds etc. DWP will likely catch up with most fraudsters eventually.

Babyroobs · 05/08/2021 21:34

The only way it would be disregarded I think is if it was being put into buying another home within 6 months.

Suzi888 · 05/08/2021 21:39

And yes, council tax will be informed.

bevelino · 05/08/2021 21:39

I wonder how DWP found out.

Babyroobs · 05/08/2021 21:40

@bevelino

I wonder how DWP found out.
Someone could have reported him or I think solicitors are duty bound to inform them of divorce settlements ( I may be wrong on that).
Suzi888 · 05/08/2021 21:42

DWP get data from banks on interest rates in bank accounts. No information is received from solicitors in connection with fraudulent claims.

Babyroobs · 05/08/2021 21:42

It is a shame really because as soon as the savings fell below 16k so after paying his own way for a few months, he would have been eligible for some UC with a deduction for savings over 6k.
Op when you say he payed his rent up front, did he then have 15k left roughly. If so he may be ok and will just owe back the deduction for anything between 6k and 15k ??

feellikeanalien · 05/08/2021 21:44

OP they will definitely reclaim the whole amount he was paid whilst his capital was over £16,000 and a proportion whilst he has between £6000 and £16,000. I had to claim UC for a short period and informed them the day I received some money from an inheritance.

The DWP have what they call an assessment period for each month you receive UC. Any money you receive in that period will affect the amount of UC paid. Because I received money from the inheritance on the last day of the assessment period they said that I had to repay the whole month's money. If I had received the money the next day I would have owed them nothing.

Because the UC payment is one payment which includes an amount to cover rent they will want the whole amount back. As others have said they will probably deduct an amount off his monthly benefit payment. If he is not going to be receiving UC but gets another benefit they will take it off that. I have the money deducted from Carer's Allowance. There is no leeway. They really won't care if he has enough to live on or not.

They are very hot on repayments and Council Tax will also issue him with a new bill to cover what he should have been paying.

Original poster
Grandadwasthatyou · 05/08/2021 21:45

@Babyroobs I think you are right. Will he get a fine in addition to having to pay anything back?

OP posts: