Is this benefit fraud?

[Gingerangel]

Just found out a friend of mine who is about to come into a large sum of money is intending to hide this money in a relatives bank account and not declare it to the DWP and have her relative just give her the cash as and when she asks for it. She’s doing this to hide it from the benefits people…

I was worried about her and told her that I think she might get into trouble doing this however she’s insisting on going ahead with this and thinks the DWP won’t notice anything is amiss. Is this benefit fraud? Can she get into trouble? And has anyone else done something like this and got away with it?

This

Yes she is breaking the law and yes she would get into trouble and a custodial sentence of up to 10yrs is open to the sentencing judge.

I used to work for DSS. I don't know what they're called these days but in my time they had a very effective fraud department. Your friend is committing fraud and they're likely to catch up with her sooner or later. She needs to do some research about the rules and have a think about what she's doing. Much better to have a clear conscience than be looking over your shoulder.

Of course it is benefit fraud.
And of course there's a papertrail.
You cannot sell a house for thousands of pounds without there being records and it seems unlikely that she's got the means to shelter it behind off-shore shell companies.

It is a potentially also tax fraud if it is not her principal private residence.
But assuming it is her PPR, then it isn't subject to CGT.

Potentially both tax fraud and money laundering by her brother.

Will possibly be picked up directly by the conveyancing/land registry process or by anti-money laundering due diligence by either the brother's bank or someone involved in the conveyancing.

It also doesn't work putting it in children's accounts because the parents are taxed on the interest above a certain amount and they (the parents are supposed to declare it above a certain amount - so more tax fraud if it isn't declared)
Also a substantial deposit would probably be flagged by the bank's anti-money laundering checks (same as it would flag in the brother's account)

It's an incredibly stupid thing to do and if her brother has learning difficulties, she's also massively taking advantage of him if he doesn't fully understand the risks he'll be taking.

Have a look at the eye watering figures for benefit fraud just for last year. It may not result in us paying any less tax, but I can assure you there will be other consequences. More money poured into detecting and dealing with fraud eats up more of the DWP’s budget and investigations will result in reports which will be used to justify wholesale welfare reform. This will inevitably result in reductions in eligibility conditions as we’ve seen several times before, and the losers will be future claimants. Fraud is fraud. As a benefit claimant you have rights and responsibilities. You have the right to claim benefit when you need to, but you have the responsibility to be honest in return for that benefit. The OP knows it’s dishonest and she knows it’s fraud. I suspect she was only posting for confirmation of that.

Yep. Say for example, said friend uses the money on a deposit for a house. The Estate Agent and solicitor will need provenance of where the money came from as they have to comply with money laundering legislation. The paper trail would inevitably lead back to the house sale and then HMRC would be involved. Once it’s established that the buyer is a benefit claimant, HMRC would involve DWP, and bingo, you’re busted !!

I wonder if the people condoning benefit fraud with different excuses and recommending the rest to mind their own business are benefit fraudsters.

Why would you wonder that? Different people have differing opinions. 🤷‍♀️

I can't believe anyone would be this stupid and take such a risk when they could literally go to prison for this. Especially when they have children to think of.

Yes it’s fraud, and it’s greedy, and very very foolish.

Then your sibling’s an idiot who will one day get caught. We’re talking a lot of money from a house sale. There’s a paper trail leading to her entitlement to half the proceeds from a house sale. DWP aren’t stupid, and unless you haven’t got a TV you can’t fail to have seen the amount of money being poured into detecting benefit fraud - extra staff, new systems and far reaching powers to check bank accounts and track spending. Add to that, she’s getting her brother into trouble as well, as he’ll be charged as an accomplice. This kind of fraud carries a prison sentence.

Add to that, she’s getting her brother into trouble as well, as he’ll be charged as an accomplice.

And potentially exploiting her brother if he does have a learning disability as OP suggests, as it's possible he won't fully understand the implications of what he's doing if so.

^This is completely bonkers advice.

Also "but no idea how they would know."

When you sell a house, there's a paper trail as long as your arm: At the land registry, the bank, the mortgage company (if the ex company is rolling his half into a new mortgaged property), the bank where her half of the cash lands (whether that's her own, her brothers, her children's or someone else's). The estate agents. The solicitors/conveyancers doing the paperwork.

It's hard to imagine a financial transaction with less of a papertrail but with more people involved who all have a professional obligation to report money laundering.

Also banks communicate with HMRC, who then communicate with the DWP.

And her tax affairs and benefits are linked by her NI number.

Well I don’t know if there will be any paper trail. Her ex husband is selling a house they both own

It seems unlikely she'd have been able to get a council house if she part owned a house (and that owned outright without mortgage? According to threads here the waiting lists are very long and eligibility criteria stringent 🤔

It sounds like she could buy something smaller with the proceeds and free the council house for someone else who has real need of it.

It sounds off to me either way.

Yes it's benefit fraud. Is she likely to be found out if the money never enters her account? Absolutely not.

Of course she will be found out. Just one example: the money enters the brother’s account. His bank investigate under money laundering regulations and freeze his account. What do you think will happen next?

The local authority will be all over it too. She'll be claiming Council Tax Reduction which is separate to UC/Housing Benefit.

The people I know who work/have worked in LA CT offices are shit-hot at sniffing out fraud from the registers/databases to which they have access.

So, potentially so far, we have:

~ the solicitor
~ her brother's bank
~ HMRC
~ DWP
~ LA

Of course her 'unique and cunning plan' will outfox the lot of them. 🙄😂

She's the type of greedy thief who get all benefits recipients a bad name.

Wow! What a nasty individual you must be

Your friend and her ex think they're being so clever by supposedly circumnavigating the system. They have no idea.

Greed and no moral compass, not only trying to cheat the system but getting her vulnerable DB to use his bank account. Poor bloke. They're not coming off as very nice people tbh.

I think you are correct that she shouldn't be concealing the money or committing fraud.
But... do you really believe that people who commit benefit fraud are making the pot smaller for everyone else?
The amount of unclaimed benefits are massive!
Why are you blaming people who are desperate instead of this shitty country that fails to support single parents adequately?

Don’t benefits also stop at some point in any investigation. I know they used to before UC. So she would also have to explain how she was supporting herself and children.

If when the time comes it won’t be a friendly chat down the job centre. It’s a full rights read, recorded interview.

Because this way the tax payer gets the burden of supporting her while she's claiming benifits and then she gets to keep/spend her substantial savings how she pleases.

Why are you blaming people who are desperate instead of this shitty country that fails to support single parents adequately?

how is this woman desperate exactly if she’s coming into an inheritance presumably around £16k (the value that NILs UC)? That’s more than working families have access to.

the government isn’t perfect but it doesn’t excuse her actions here

Actually I have never claimed benefits and I am not entitled to a penny. I also think that a lot of people that are on universal credit have a very unfair advantage over working people in certain circumstances especially when it comes to children and childcare. It actually makes me very angry.......However what also makes me angry are tell tale goody goody pip squeaks. If you are a friend you don't deliberately land your friend in it just to feel slightly superior for all of 2.5seconds

You're probably correct but it would be nice to think the money would go to services where it is genuinely needed.