Wednesday, August 11, 2010

Credit profiling and benefit claimants

I'm sure everyone has by now seen the articles about David Cameron's latest crackdown on benefits claimants, with plans to pay private companies to rummage through claimants' accounts. I'd refer to his crackdown "on benefits cheats" but that's not really true - benefit fraud, particularly for disability benefit, is at less than 1%, which means that for every one fraudster he cracks down on, 99 genuine claimants, already dealing with poverty, sickness, disability, job loss and whatever other issues have led to them legitimately being on benefits, are being terrified and harassed. He's attacking claimants.

More money is lost through administrative error than through fraud. So it's interesting that Mr Cameron's plan of attack involves rummaging through the personal affairs of claimants rather than training his staff at the DWP and Tax Credits units to make fewer mistakes. Surely staff training is cheaper than investigating millions of claimants?

According to the Citizen's Advice Bureau, there's about £17bn of benefit that is unclaimed because people either don't know they're entitled to it, or can't deal with the application/appeals processes. Perhaps Mr Cameron is aiming to increase the unclaimed benefit with his campaign of "if you claim anything, we're going to have our grubby little paws all over your bank accounts and make your life a misery."

I'm very relieved to not be on means-tested benefits any more (I get DLA but that's for disability-related expenses such as mobility equipment, and not dependent on earnings or work status), as I almost certainly would have had a credit profile with red flags. The most regular things I bought on my credit/debit cards while living alone on IB and HB/CTB were:

- grocery shopping for more than one person and including baby stuff like clothing, food and nappies. (While I lived in Lowestoft, friends who drove would give me a lift to the supermarket. In order to take advantage of multi-buy offers and "spend £100 and get a voucher for cheaper petrol" offers, I'd pay for all our combined shopping in one go on my credit card, and then we'd split it up and sort out the cash when we got home.)

- lots of petrol, plus various car repairs and accessories. (I can't drive, but I often bought petrol for friends who drove me places and wouldn't accept any cash, and for Pip I also covered minor repairs on his car because without it I lost a lot of mobility).

I'd also occasionally buy larger or more expensive items for friends who didn't have the credit card/internet access combination at their disposal. They'd give me the cash, I'd order their (whatever), and it would be delivered to my address - because I was in most of the time anyway, and unlike the post office, they could collect from my flat outside working hours.

So I probably credit-profiled as a car owner/driver who shopped for a household of two or three adults and one or two young children and who had a reasonably high amount of disposable income for personal electronics. Which would be rather at odds with my claim to be a single disabled person, in a tiny one-bedroom flat, too ill to drive, no kids, and a low income.

It's just as well I'm not on IB any more otherwise they would have wasted a *lot* of time investigating me. But these sorts of informal money-saving measures are common amongst people on low incomes or with limited resources.

The other thing that tickled me was the idea that they will be looking for people spending money on gardening or DIY. You show me a person with a long-term medical condition and I'll show you a person who has been told by at least three medical professionals that they should try a spot of gardening by way of occupational therapy.


Pandora Caitiff said...

The whole story made me really angry.

1) A private company will be paid by results. What are the chances they'll be less than rigourous in order to boost their results (and therefor pay packet)?

2) There are x million cheats. HOW DO THEY KNOW? It's pure guess work and speculation. Until they investogate it fully they can't know.

2a) Cameron is going to get back £x million. Really? What if there's just not that much fraud? Will it be clawed back regardless?

3) Jingoism. Its harder to get Daily Mail readers to jeer, "Yeah! Train those bloody civil servants!" than it is to yell, "Yeah! Bloody scroungers!" And there are far too many people about whose motto is, "Those type of people had better not be getting anything free!"

There's more, but the vein in my forehead is threatening to explode.

Mary said...

I know the answer to #2.

Every year some 12,000 claimants are picked at random and thoroughly investigated by DWP.

The percentage of those who are found to be cheating the system in some way is calculated for that 12,000 and rounded to the nearest 0.1%.

For example, DLA fraud is reckoned to be at 0.5%, which means that of every 12,000 DLA claimants they investigate, ~11,940 are just as disabled as they claimed to be (or more so) and their claims are legitimate.

I've always found it interesting that of the ~60 people found to be claiming fraudulently, only one or two are ever interesting enough to make the headlines. Perhaps the media are aware that if they tried to run an article of "he said he could only walk 50 yards, but here he is on film walking a full 120 yards before collapsing!" it might not be so well received.

Pandora Caitiff said...

OK I'll conceded its an educated guess then :)

Its useful for statistical analysis, and policy-making. I wouldn't really think it was wise to base enforcement totals on it though.

Its a bit like dividing the number of Uk citizens, by the number of crimes reported yearly, and using that to come up with a police arrest target.

Oh... :(

Anonymous said...

all your blogs include some kind of benefit or claim of one kind or another, aren't you tired of fighting virtually ??

Mary said...

Anonymous 9:37, I'm not quite sure what you mean?

A quick look at my last few blog posts shows a geeky cartoon strip, a ramble about painkillers, and a how-to of my wedding save-the-dates, without a claim in sight.

I know welfare is a recurring theme on this blog. It's important to me. I was dependent on it when I first got sick, without it I would have been truly up s--t creek. Even now, I've worked for about 3 years, but I'm all too aware of how precarious the balance between my health and my work is, how many different factors could slip and see me welfare-dependent again. It's worth fighting for even though I hope I never have to use it again... just in case.

I can hardly go on a march, though, so virtual fighting it shall remain.