Fraud and errors in pension credit claims cost taxpayers over £500 million last year, according to the Department for Work and Pensions (DWP). The benefit, which tops up the income of around 1.4 million of Britain's poorest pensioners, is worth an average of £3,900 a year per claimant.
Of the total losses, £270 million was attributed to deliberate fraud, up from £210 million the previous year, while £240 million was lost due to claimant errors. The DWP said the two main reasons for fraud overpayments were claimants failing to report time spent abroad or changes in their capital, such as savings, investments or property.
However, campaigners argue that much of what is classified as fraud may be accidental. Sir Steve Webb, a former pensions minister, said: 'I don't want to be naïve about some of it being deliberate, but the idea there is a large number of pensioners conniving money through malicious fraud seems unlikely.' He noted that pensioners might unintentionally breach rules by, for example, visiting family abroad for slightly over the permitted four weeks.
Morgan Vine, director of policy at Independent Age, called for the application process to be streamlined, describing it as too complicated. She said some cases 'showing up as fraud in the statistics' may simply be 'people who have struggled to work out the rules'. The DWP's 24-page pension credit application form contains more than 200 questions about personal finances.
Dennis Reed, director of Silver Voices, pointed out that the £270 million lost to fraud is relatively low compared to the estimated £1.5 billion of pension credit that goes unclaimed each year. He added: 'We're not talking about big-time criminality.'
