It is estimated that fraud against the benefits and tax credit system costs the UK £1.9 billion every year. Last month the Director of Public Prosecutions, Keir Starmer, QC, published new guidelines for prosecutors dealing with fraud cases involving state benefits and tax credits. This follows the merger of the DWP Prosecutions Division with the CPS in April 2012 and the transfer of prosecutorial staff to the CPS Welfare, Rural and Health Division.
Under the new guidelines, prosecutors will be told to seek tough penalties in cases with aggravating features. These include cases in which multiple offences have been committed, where there has been an abuse of position or where there has been substantial loss to public funds. Plus, professionally planned frauds, the use of a false or stolen identity and cases involving attempts to dispose of the evidence will also be targeted.
Also, where the alleged offending merits such an approach, and prosecutors anticipate a very substantial prison sentence, they should now charge under the Fraud Act which carries a maximum sentence of 10 years, rather than using specific social security legislation which carries a maximum sentence of seven years.
At the same time, Starmer has announced an end to the £20,000 threshold. Previously, frauds below this figure were automatically tried in magistrates’ courts, meaning a maximum sentence of just 12 months. However, it is worth questioning whether this measure will be cost-effective, given the high price to the taxpayer of a custodial sentence.