PIP cuts wrong way to tackle ‘alarming’ benefit fraud, Labour warned ...Middle East

The plan to cut disability benefits won’t tackle “alarming” levels of benefit fraud in the UK, experts have warned the Government.

Sir Keir Starmer is trying to head off a Labour backbench rebellion over plans to restrict access to personal independence payments (PIP), worth up to £800 a month to disabled people.

Ministers also want to tackle “out of control” benefit fraud with a bill granting government powers to check claimants’ finances with their bank or building society.

But welfare experts and campaigners told The i Paper that Labour’s drive to squeeze PIP is “unfair and misdirected” since fraud for the disability benefit is so low.

Some believe the Department for Work and Pensions (DWP) should focus on cracking down on the main out-of-work benefit universal credit – which makes up the large majority of the money lost to fraudsters.

The latest figures show overall benefit fraud fell to £6.5bn in 2024-25, down from a record high of £7.4bn the previous year.

While £5.2bn of the total sum was lost to universal credit fraud, only £100m was lost to PIP fraud.

Benefit fraud remains higher than before the Covid crisis, and DWP minister Andrew Western recently described the sums being lost each year as “staggering”.

The Government has said it wants to bring the rising number of PIP claimants under control and hopes more of them can get into work.

Dr Ciara Fitzpatrick, a social security expert at Ulster University, criticised the rhetoric used by the Government to justify its PIP cuts.

She pointed to comments made by Work and Pensions Secretary Liz Kendall, who said earlier this year that some people on health-related benefits were “taking the mickey”.

Dr Fitzpatrick said the Government had “suggested some people are exaggerating conditions, particularly mental health conditions, and are claiming PIP when they don’t deserve it”.

She added: “It’s misdirected because PIP fraud is much, much lower than other benefits. With PIP you have to go a very arduous process to check on conditions.”

Georgina Colman, a PIP claimant and founder of Purpl discount website for disabled people, said the push to restrict PIP was “so unfair”.

The campaigner added: “If there is fraud in universal credit that need to be tackled, then it shouldn’t be taken out onto the disabled community.”

New, tougher qualifying criteria will see around 800,000 PIP claimants lose an average of £4,500 per year, according to government estimates.

And around 730,000 future recipients of universal credit – who will see the health element cut – face an average loss of £3,000 per year.

The Government expects to save £4.8bn a year from the reforms by 2030. It also expects to save £1.5bn over the next five years by boosting its fraud-busting powers.

Experts pointed out that universal credit fraud was far higher than with PIP because it is a means-tested, work-related benefit.

It means some people can lie about their savings – or about how much work they are doing – to meet the universal credit criteria.

Tom Waters, associate director at the Institute for Fiscal Studies (IFS), noted that PIP was not income or work related.

Parts of the PIP assessment process – which relies on medical evidence to judge how much support someone needs with daily living and getting around – are “somewhat subjective or vague”, he said.

“I think it would seem to most people that there’s a difference between truthfully describing your condition in a way that’s more favourable to getting approved [for PIP], and outright fraud,” said the IFS welfare expert.

Waters said the current level of universal credit fraud “does strike me as high”. But the IFS expert said a major push to crack down on it was a “trade-off” for the DWP because it would take a lot of resources.

John O’Connell, chief executive of the TaxPayers’ Alliance, said the £6.5bn lost to benefit fraud last year was “alarming”. He added: “Ministers must get a grip, tighten checks – especially on universal credit.”

The DWP has plans to recruit another 3,000 staff in a bid to claw back more of the benefit money being lost to fraudsters.

The Government has said its fraud bill currently moving through Parliament will “initially focus” on universal credit and pension credit – but other benefits could be added in future.

It will grant the DWP the power to ask banks and building societies to verify a benefit claimant’s financial details to check up on their eligibility.

Mikey Erhardt, of Disability Rights UK, said the charity was worried PIP could be added to the fraud crackdown in the years ahead. “We’re worried they [the DWP] will be checking people’s details with banks systematically, and it will become routine surveillance.”

Erhardt also said it was “unfair to focus so heavily on PIP” in welfare cuts when “the level of fraud is next to nothing”.

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Dennis Reed, director of the Silver Voices campaign group for senior citizens, described Labour’s fraud bill as “a snooper’s charter” and a “blunderbuss” way of trying to tackle the problem.

Reed is worried some older people who get pension credit will be “red flagged” by DWP staff “when there might be a simple mistake”.

Pension credit is another means-tested benefit for older people on the lowest incomes, but qualifying can depend on how much savings someone has in their bank account.

There was £270m-worth of pension credit fraud last year, a small part of the overall £6.5bn loss. “I don’t think pension credit is a huge problem. It’s universal credit where most fraud occurs,” said Reed.

Baroness Ros Altmann, the former Conservative pensions minister, is also worried by a potential crackdown on pension credit claimants.

Baroness Altmann said some older people claiming the top-up benefit may have “misunderstood” complicated questions on the application form or “genuinely forgotten” about some of their savings.

“It seems to make sense for the efforts to tackle fraud to focus on where the biggest losses are occurring – which would be universal credit,” said the Tory peer.

MPs on the public accounts committee warned in 2021 that the Covid crisis had opened up weaknesses in the DWP’s systems, which both “organised criminals and dishonest opportunistic individuals have used to steal from the taxpayer”.

A DWP spokesperson said the Government had cut fraud by around £800m in the last year, and expected to save more with powers in the fraud bill.

“The vast majority of people who are currently getting PIP will continue to receive it,” they added. “We’re creating a sustainable welfare system that genuinely supports sick or disabled people while always protecting those who need it most.”

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