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HOUSING & COUNCIL TAX BENEFIT ANTI-FRAUD POLICY

December 2014

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Contents

Section

Page

Housing & Council Tax Benefit Anti-Fraud Policy

1 Introduction 3

2 Definition of Benefit Fraud 4

3 Culture 4

4 Prevention 4

5 Detection and Investigation 6

Housing and Council Tax Benefit Sanction and Prosecution Policy

I Statement of Intent 8

II Evidential Criteria 9

III Public Interest Criteria 9

IV No Sanction or Prosecution 9

V Civil Penalties for Incorrect Statements 10

VI Sanctions as alternatives to Prosecution 10

VII Prosecution 12

VIII Recovery of Overpayments 12

XI Loss of Benefit Provision 12

Appendix A The Code for Crown Prosecutors

Appendix B Code of Conduct for Benefit Fraud Investigation Staff

Appendix C Department for Work and Pensions Prosecution Policy

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Gravesham Borough Council

Housing & Council Tax Benefit Anti-Fraud Policy

1. INTRODUCTION 1.1 Gravesham Borough Council is committed to the delivery of Housing &

Council Tax Benefit to its citizens and considers benefit is for those who are most vulnerable in society. It is important to detect and prevent fraud and error in the first instance and as such the council seeks to check and verify all original documents and personal circumstances before making payments or amending existing payments of benefit to claimants.

1.2 The council is opposed to all forms of fraud and corruption. It recognises that

fraud and corruption undermine the standards of public service, which it promotes, and reduces the resources available for the good of the whole community. The council has issued an Anti-Fraud and Corruption Strategy and a Whistleblowing Policy to encourage prevention, promote detection and support the investigation of allegations of fraud or corruption at a corporate level.

1.3 This Housing & Council Tax Benefit Anti-Fraud Policy is designed to reinforce

the Anti-Fraud & Corruption Strategy specifically in relation to Housing and Council Tax Benefit Administration and is designed to: -

� stop fraudulent claims from entering our systems

� find any fraudulent claims already in the system

� stop payments from going to people who are not entitled to it

� punish those people who commit fraud

� recover fraudulent overpayments of benefit

� deter people from trying to commit fraud 1.4 The Housing, Council Tax Benefit Anti-Fraud Policy and the Sanctions &

Prosecutions policy will be reviewed at least annually by the Investigation Manager, with any material amendment subject to the approval of the Cabinet.

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2. DEFINITION OF BENEFIT FRAUD 2.1 Benefit fraud is where a person, dishonestly, or not, a) Falsifies a statement or a document; or b) Is involved in a failure to notify a relevant change of circumstance; or c) Omits relevant information

for the purpose of obtaining or increasing entitlement to housing& council tax benefit for themselves or another.

3. CULTURE 3.1 The council is determined that the culture and tone of the organisation will

continue to be one of honesty and opposition to fraud and corruption and as such has established a dedicated Investigation Team.

3.2 The council’s staff and members, at all levels, are an important element in its

stance on fraud and corruption and should lead by example. They are encouraged to raise any concerns and can do this in the knowledge that these will be treated in confidence and properly investigated.

3.3 Instances of suspected/alleged Housing Benefit and/or Council Tax Benefit

fraud may be referred for investigation to the Investigation Team. Investigation Officers are based in the Audit and Performance Service and can be contacted on extension 7338/7231 or through the e-mail system. All staff conducting either investigations and or interviews should be aware of the council’s procedures for dealing with unacceptable and aggressive behaviour, which is contained within the Statement of Health and Safety Policy found in the Staff Portfolio.

4. PREVENTION Staff 4.1 To reduce the risk of fraud and error it is vital that the qualifications and

employment histories of potential recruits are comprehensively checked. Benefits staff should also sign an annual declaration covering any interests that may conflict with their work. For example, receiving HB and/or CTB, or acting as a landlord or agent.

4.2 All individuals within the Investigation Team are required to act with integrity and follow the Code of Conduct for Investigation Staff (see Appendix B).

4.3 Employees must declare any circumstances where their personal interests (financial and non-financial) may conflict with those of the council e.g. processing a Housing or Council Tax Benefit application form for a relative or friend.

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4.4 Procedures have been designed to ensure that the work of one member of staff is checked by a Senior Benefits Officer. These types of checks are important deterrents to fraud and error.

4.5 Benefits staff will receive Fraud Awareness training as part of their induction. Thereafter they will receive annual refresher training.

4.6 Appropriate staff both internally within the council and externally will receive benefits fraud awareness training.

4.7 All Investigation Officers will undertake training in order to ensure that they carry out their duties in accordance with recognised standards for Benefit Fraud Investigation as set out in the Local Authorities Benefit Fraud Manual. Guidance can also be obtained from the DWP Fraud Manual located within the secure IRRV website. In addition they will undertake any training required by the Department for Work and Pensions in order to use specific powers under the Social Security Administration Act and Social Security Fraud Act (Authorised Officer powers).

Systems

4.8 It is a management responsibility to maintain the internal control system. This includes the responsibility for the prevention of fraud and other illegal acts. By undertaking an agreed plan of work, internal audit will evaluate the adequacy and effectiveness of these controls as a means of assisting management to discharge its responsibilities.

4.9 All Benefits recording systems must be designed in consultation with and to

the satisfaction of the Assistant Director (Finance). Access to data must be controlled by use of passwords with an audit trail kept of transactions

4.10 All staff with access to the confidential details of claimants will be responsible

for ensuring the control of physical access to the data and will be responsible for compliance with the Data Protection Act and the Freedom of Information Act. This responsibility requires managers to ensure that the physical access to equipment is restricted, as far as practical, to authorized users only. All individuals must protect their passwords and not keep them written down or ‘lend them’.

4.11 All manual investigation records must be kept securely filed when not in use

and access to these files must be restricted to designated officers only. 4.12 All valuables, including documentation, must be recorded and tracked through

the council system until returned to the originator. Where these items are hand delivered a receipt will be given to the originator.

4.13 All telephone calls received in relation to Benefit Fraud will be recorded

manually and a note of the content of the conversation will be kept on file.

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5. DETECTION AND INVESTIGATION 5.1 Surveys by the Audit Commission have identified that Housing/Council Tax

Benefit Fraud is one of the largest area of detected fraud in local government. 5.2 Whilst encouraging genuine claimants to apply for benefit or a reduction the

council has adopted a number of initiatives to detect and prevent fraudulent applications, such as:

���� operation of a fraud ‘hotline’; 01474 337231/337400

���� participation in the Department for Work and Pension’s monthly data-matching exercise;

���� using computer links to the Department for Works and Pensions to check entitlements and to receive benefit notifications;

���� undertaking land registry checks;

���� carrying out joint fraud investigations with other bodies such as the Counter Fraud Investigation Service, Home Office, Kent Police, other Local Authorities and other investigation departments;

���� publicity of anti-fraud initiatives and the Fraud Hotline number including regular articles in ‘Open Door’, ‘Your Borough’ and press releases to the press office.

5.3 All referrals passed to the team will be sifted and vetted for strength of

evidence. All cases where the evidence is considered sufficient to investigate will be logged on to the Northgate Fraud Management System and a case file opened.

5.4 The council’s Disciplinary procedures will be used where the outcome of an

investigation indicates improper behaviour by a council employee. 5.5 Members of staff within the Benefits Section should refer suspected cases of

fraud to the Investigation Team by completing the Referral Form on Northgate. The Investigation Team will give feedback to staff regarding the quality of the Fraud Referral and the outcome of any resulting investigation.

5.6 The Investigation Manager will circulate a quarterly report on the outcome of

referrals. This report will include the source of the cases and details of the fraud type. This report will be given to the Service Manager – Revenues & Benefits and all benefit staff.

5.7 All claims where there is sufficient proof for the council to believe that benefit

has been claimed fraudulently will be dealt with under the Sanctions and Prosecution Policy. The sanctions open to the council include a Caution, an Administration Penalty or Prosecution.

5.8 The council will take action, including legal recovery, in order to recover all

overpayments of Housing & Council Tax Benefit that result from fraudulent activity or claimant failure to notify a change of circumstances, regardless of whether sanction action takes place, and may consider imposing a civil

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penalty of £50 for negligently failing to report changes in circumstances.

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Gravesham Borough Council Housing and Council Tax Benefit Sanction and Prosecution Policy

I. STATEMENT OF INTENT

� Gravesham Borough Council has a duty to administer claims for Housing and Council Tax Benefit and a responsibility to prevent and detect benefit fraud. Gravesham is committed to protecting public funds and will consider taking prosecution action against any person suspected of committing benefit fraud.

� Gravesham Borough Council has decided that its Prosecution Policy

should not be entirely related to the monetary value of the offence. This is because Gravesham is an area where rents vary widely depending on the location and type of property in question. In these circumstances a purely monetary policy would not be appropriate. All cases will be looked at on their own merit and any mitigating circumstances taken into account.

� The decision on whether a case is suitable for sanction action lies with the

Investigations Manager. A sanction recommendation will be completed by the investigating officer and then reviewed by the investigations manager in accordance with the sanction policy to determine what course of action, if any, is appropriate. This review will take into account;

� The evidential test criteria,

� The Public interest test criteria,

� Value and length of the offence,

� Local prevelance,

� Social and health factors, and

� Any other mitigating factors

� Cases deemed suitable for prosecution may be passed to the Department for Work and Pensions Solicitor’s Office under the existing Local Authority Prosecution arrangements. These cases are generally prosecuted under the Social Security Administration Act 1992.

� Cases that are progressed under the One Customer One Team (OCOT)

agreement with the Department for Work and Pensions will be subject to this policy and consideration given to the Department for Work and Pensions sanction policy (as shown in Appendix C) when considering offences committed against Gravesham Borough Council.

� Opinion will be gained from a legal professional either in house or private to ensure a robust case is presented at court.

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II. EVIDENTIAL CRITERIA

� Gravesham Borough Council may consider sanction action if the case is serious enough to warrant it.

� In order for any Sanctions to be considered the case must meet the

evidential criteria. In other words is there sufficient evidence for a realistic prospect of a conviction?

� In making this decision, the following factors will be considered;

� How clear the evidence is � If there has been any failure in the investigation � If there has been any failure in benefit administration

III. PUBLIC INTEREST CRITERIA

� If the evidential criteria are met then the council will consider whether or not Sanction action would be in the public interest. In making this decision, the following factors will be considered first:

� Medical conditions � Other social factors � Financial implications compared with losses � Council’s Vulnerability Policy

� If these still indicate that a sanction is appropriate then the other Public Interest Criteria as shown in The Code for Crown Prosecutors listed at Appendix A, will be considered in order to decide the appropriate sanction.

IV. NO SANCTION OR PROSECUTION

� Gravesham Borough Council may consider closing the case without any further action if:

� To our knowledge the claimant has never previously offended � The offence is minor � The period over which the fraud has been committed is very short � The overpayment is very low � The case does not satisfy the Evidential and Public Interest

Criteria

� In cases where no further action is appropriate and an Interview Under Caution has taken place a letter will be issued stating that no further action will take place, however a strong reminder advising of the responsibility to notify changes and correct information will be included in the letter.

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V. CIVIL PENALTIES FOR INCORRECT STATEMENTS

� Even if it is determined Gravesham Borough Council will not take any sanction or prosecution action in respect of offences committed, they may still consider issuing a civil penalty for failure to notify the appropriate authority of a relevant change in circumstances

� The Authority may consider imposing a penalty of £50 on a person where:

� The Person negligently makes an incorrect statement or representation, or negligently gives incorrect information or evidence.

� In or in connection with an application; or � In connection with the award of Housing and/or Council Tax

Benefit; � Fails to take reasonable steps to correct the error � The error results in an award of Housing and/or Council Tax

Benefit which is greater than the amount to which the person was entitled; and

� The person has not been charged with an offence or cautioned, or been given an administration penalty.

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VI. SANCTIONS AS ALTERNATIVES TO PROSECUTION

� Where the authority has reviewed a case and is satisfied that an offence has been committed, mitigating factors may suggest that an alternative form of sanction should be considered in the first instance as a more suitable means of disposal.

� These alternative sanctions take the form of a caution or an administrative penalty.

� A Caution;

� Acts as a final written warning for the offence committed, � Is for benefit administration purposes only � Is not a criminal record and therefore, does not affect a person’s

employment prospects � Is recorded centrally by the Department for Work and Pensions � Remains on record for a period of 5 years, � Would be cited at proceedings should any subsequent offences be

committed within the 5 year period

� The Authority may consider issuing a Caution if:

� To our knowledge the claimant has never previously offended, or � The person has committed benefit fraud before but the offence

was minor and the current offence is also minor, � There was no planning involved in the process, � There was no other person involved in the fraud, � The offence is minor, � The amount of overpayment is relatively low,

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� The person has fully admitted the offence during an IUC, � The person’s subsequent attitude, e.g. whether they express

genuine regret for what they have done, � Criminal proceedings are not the first option

� An Administrative Penalty;

� Is a financial penalty calculated as a percentage of the fraudulent overpayment, which is set at;

o 30% of the total overpayment, or o For offences committed wholly after 8th May 2012, 50% of

the total overpayment, with a minimum of £350 and a maximum of £2,000,

� Is for benefit administration purposes only, � Is not a criminal record and therefore, does not affect a person’s

employment prospects, � Is recorded centrally by the Department for Work and Pensions � Remains on record for a period of 5 years, � Would be cited at proceedings should any subsequent offences be

committed within the 5 year period

� The Authority may consider issuing an Administrative Penalty if:

� To our knowledge the claimant has never previously offended, or � The person has committed benefit fraud before but the offence

was minor and the current offence is also minor, � There was no planning involved in the process, � There was no other person involved in the fraud, � A Caution is not appropriate as there has been no admission to

the offence, � The offence is minor, � Criminal proceedings are not the first option

� If a person refuses to accept a caution or administrative penalty, the case

will be referred for prosecution.

� Even if the above criteria for Cautions and Penalties was satisfied Tonbridge and Malling Borough Council may decide that a Caution or Administrative Penalty is not appropriate if the person:

� Has been prosecuted for a benefit offence in the last 5 years. � Has been cautioned two or more times in the past five years.

� This is because this would indicate that

� Previous sanctions have not deterred them from re-offending, � Their lack of contrition for the offences committed, � Their disregard for the legislation, � A deliberate and repeated intent to commit benefit fraud, � Their apparent belief that these offences are not serious.

� Instead Tonbridge and Malling Borough Council may consider referring the case for prosecution.

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VII. PROSECUTION

� The final decision on whether to refer a case for prosecution lies with the Investigation Manager.

� Once a decision to prosecute has been made, the case will be presented

to the Council’s Legal team, who will provide an opinion on the evidential and public interest test.

� If the evidential and public interest tests have been satisfied, the case will be authorised by the legal team and passed for prosecution. If the Legal team consider the evidential and public interest test has not been met the case will be referred back to the Investigation Team with a recommendation.

� In addition to the Evidential Criteria and Public Interest Criteria outlined

above the following will also be taken into consideration;

� Whether the claim was false from inception, or � The change in circumstances was intentionally withheld, � Whether there was planning in the process, � Whether the suspect was a ring leader or an organizer of the

offence, � Any previous incidence of fraud, � Whether there has been any abuse of position or privilege, � The amount of the overpayment, � The duration of the alleged offence, � Whether there are grounds for believing that the offence was likely

to be continued or repeated, based on the person’s previous history.

� Whether the offence is widespread in the area where it was committed and so prosecution may act as a deterrent,

� Whether the person has refused to accept a Caution or Administrative Penalty

VIII. RECOVERY OF OVERPAYMENTS

� Regardless of whether or not any Sanction action is taken, Gravesham Borough Council will attempt to recover all overpayments. This action is taken by the Overpayments Officer who will pursue all available methods of recuperating the debt including taking civil action when necessary.

IX Loss of Benefit provision

� The Social Security (Loss of Benefit) Provisions Amendment Regulations 2010 introduced a revised loss of provision option that includes those cases where there is only Housing or Council Tax benefit in payment for offences occurring after 1 April 2010.

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� These are only applied to the principle benefit in payment at the discretion of the Department for Work and Pensions. Where there is Housing and Council Tax Benefit in payment they will be applied to whichever benefit is the greater.

� The “first strike” can be applied to all cases where there is a sanction (Caution, Administration Penalty or Prosecution) arising from a fraudulent overpayment of benefit. The loss of benefit is applied for a four week disqualifying period. The benefit can be withdrawn, or reduced by 20% or 40%.

� The “two-strikes” loss of benefit provision can be applied to those cases where there has been two benefit related sanctions within a five-year period. In these cases the person can be disqualified from receiving benefit for a thirteen- week period.

� The “three-strikes” can be applied to those cases where there are more than two benefit related sanctions within a five-year period. In these cases the person can be disqualified from receiving benefit for a six-month period.

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Appendix B

CODE OF CONDUCT FOR BENEFIT FRAUD INVESTIGATION STAFF

Code of Conduct & Good Practice for Investigation Staff

This code applies to all officers engaged in carrying out duties involving the investigation of Fraud.

The code should be read in conjunction with the legal requirements of the post and current staff rules.

The Service Manager – Audit and Performance will deal with a breach of The Code of Conduct and Good Practice.

Inefficiency is a breach of this Code, and falls short of the expected standard and may require remedial training.

General Conduct Officers of Gravesham Borough Council will not:

• exceed their actual authority or hold themselves out as having any authority not provided by legislation.

• act in any way, benefit or gain, which exceeds the limits of their powers.

• misuse their official position for any benefit or gain for themselves or another.

Legislation

• Officers must pursue all reasonable lines of enquiry even if it points away from a suspect’s guilt

• Ensure that all material that is gathered during the investigation is recorded and retained and that all relevant material is revealed to the prosecutor in accordance with The Criminal Procedure and Investigations Act and the Codes of Practice

• Ensure that the Codes of Practice are observed in accordance with The Police and Criminal Evidence Act.

• Ensure that applicable provisions of The Regulation of Investigatory Powers Act and the Codes of Practice and guidance in relation to directed surveillance are adhered to.

• Observe all other applicable legislation and internal and external guidance

Evidence (witness and suspects)

Officers to whom the Code applies must not under any circumstances:

• Conceal or fabricate evidence or knowingly allow any evidence to be concealed or fabricated.

• Discriminate or exercise any bias on the grounds of race sex, marital status, sexual orientation, or disability.

• Accept or offer any inducement, bribe or other advantage from or to any witness or suspect.

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• Use any information gathered in the course of their duties for personal gain or coercion or otherwise misuse such information.

• Do or fail to do anything that may result in a miscarriage of justice.

Disclosure of Interests

• Officers must declare any circumstances or interests which may affect their ability to conduct an investigation objectively.

• Any relationship to or with a suspect or witness or informant.

• Any personal interest in the outcome of an investigation or other civil or criminal Proceedings.

• Their dependency on alcohol or drugs other than those prescribed.

• Officers should disclose to their line manager if they are or have been subject to any: summons, charge, or arrest.

Information

• Officers must treat all information gathered for evidential purposes during an

investigation as confidential and, must not deliberately or negligently:

• Disclose such information to an unauthorised third party.

• Reveal the source of the information to an authorised third party.

• Personal Injury and Damage to Property

• Officers, must exercise all reasonable care to prevent injury to the person, loss or damage to the public and private property, and must not:

• Forcibly enter public or private property except to save life or prevent serious

injury or on the invitation of the occupier or other responsible person or constable.

• Deliberately or negligently destroy or damage any property. • Seize or retain any property without lawful authority. • Use threatening physical violence towards a colleague or member of the

public.

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Appendix C

Sanction Policy:

In respect of fraudulent Social Security Benefit Claims

The Department for Work and Pensions

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1. Sanction Policy of the Department for Work and Pensions 1.1 This document sets out the policy of the Department for Work and Pensions (DWP)

towards sanctions, including criminal prosecutions, for offences relating to ‘National’ benefit fraud.

1.2 ‘Local’ benefits (Housing Benefit and Council Tax Benefit) are administered by local

authorities as part of their statutory local government functions. The sanctions policy in each local authority is therefore a matter for its members. However in practice local authority sanction policy broadly follows the approach of the DWP.

2. General Principles 2.1 The Department for Work and Pensions is committed to the prevention, detection,

correction, investigation and, where appropriate, prosecution of fraudulent benefit claims.

2.2 The aim is to prevent criminal offences occurring by making it clear to our customers

that they have a responsibility to provide accurate and timely information about their claims; to punish wrongdoing; and to deter offending.

2.3 This policy supports the new Departmental Strategic Objective (DSO 6) to pay our

customers the right benefits at the right time which has replaced the Public Service Agreement (PSA 10) to reduce losses from fraud and error for people in working age, on Income Support and Jobseeker’s Allowance. It also demonstrates the Department’s determination to drive down fraud across the full range of welfare benefits.

2.4 Each potential fraud referral is assessed against national criteria. This assessment

will result either in cases being investigated further under criminal investigation standards as set out within the remainder of this document or referred for customer compliance action.

2.5 Customer compliance action usually comprises a robust interview with the customer

where they are questioned about any allegations. Further action depends upon the outcome of the interview but they will be reminded of their responsibilities and may be advised about future conduct and required to rectify or withdraw their claim.

2.6 The evidence obtained in each case that is subject to criminal investigation is

considered on its own merits, having regard to all of the facts in deciding the most appropriate sanction.

3. Organisation 3.1 Criminal investigations are undertaken by the Department’s Fraud Investigation

Service (FIS) in accordance with:

♦ the Police and Criminal Evidence Act 1984 (PACE) and its codes of practice

♦ the Criminal Procedures and Investigations Act 1996 (CPIA) and its codes of practice

♦ all other relevant legislative and common-law rules

♦ Departmental policy

♦ advice from the Department’s Prosecution Division. 3.2 Fraud Investigation Service investigators receive Professionalism in Security (PINS)

training which is accredited by Portsmouth University. Additional guidance is provided by the Fraud Procedures and Instructions Manual which is regularly updated to ensure that:

♦ investigations are conducted in a legal and professional manner

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♦ policy and legislation is correctly applied, and

♦ approved working methods are applied. 3.3 In England and Wales the Department’s Prosecution Division decides whether cases

submitted by FIS are suitable for prosecution and then prosecute the case. Most cases are heard by a Magistrates Court, although the more serious cases are usually referred to Crown Court.

3.4 Prosecution Division provides advice and guidance to investigators throughout the

investigative and prosecuting process. They do not conduct any part of the investigation but advise on the investigator’s obligations, evidential requirements and any appropriate charges. In deciding which cases are suitable for prosecution, Prosecution Division applies the evidential and public interest tests set out in the Code for Crown Prosecutors.

3.5 The Department’s Fraud Expert Domain within Jobcentre Plus’ Products and

Transformation Division provides guidance to investigators on operational policy and technical matters.

3.6 In Northern Ireland the practice is to refer cases suitable for prosecution to the Public

Prosecution Service, whilst in Scotland cases thought suitable for prosecution go to the Procurator Fiscal.

3.7 The Department also works closely with local authorities operating under similar

prosecution practices. The Welfare Reform Act (WRA) 2007 provided local authorities with powers to investigate and prosecute offences against certain national social security benefits alongside Housing Benefit and Council Tax Benefit (HB/CTB). It also provided access to such information as is necessary to carry out these activities.

3.8 Prosecution Division also prosecutes benefit fraud cases for local authorities that

have signed a Service Level Agreement with it. 4. Sanction Policy 4.1 Where an offence has been committed the Department can consider offering a

caution, an administrative penalty, or instigating a prosecution. The choice will depend on the factors below.

4.2 Cautions: 4.2.1 A caution is an administrative sanction that the Department in England and Wales is

able to offer as an alternative to a prosecution as long as specific criteria are met, and the case is one the Department could take to court if the caution was refused.

4.2.2 Cautions are usually aimed at the less serious benefit frauds and those where the

overpayment is under £2,000. It also provides an additional tool for the Fraud Investigation Service to use in those cases where the deterrent effect is considered a sufficient and suitable alternative to prosecution or an administrative penalty.

4.2.3 The offender must make a clear and reliable admission of the offence verbally or in

writing and there must be a realistic prospect of conviction if the offender were to be prosecuted in line with the full Code Test of the Code for Crown Prosecutors.

4.2.4 If the customer is subsequently prosecuted for another benefit offence the caution

may be cited in court.

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4.2.5 In Scotland a caution is known as an administrative caution and cannot be cited in court, but may be referred to in a report submitted to the procurator fiscal for consideration of prosecution of any subsequent offence.

4.3 Administrative penalties: 4.3.1 An administrative penalty is the offer to the customer to agree to pay a financial

penalty where the customer has caused benefit to be overpaid to them, by either an act or omission. The amount of the penalty is currently stipulated at 30 per cent of the amount of the gross overpayment.

4.3.2 It is current DWP policy to offer these penalties where the case is deemed to be not

so serious and the offer of an administrative penalty is considered a suitable alternative to prosecution, and where the gross overpayment is under £2,000. Unlike cautions no admission of guilt is required from the customer before offering an administrative penalty, although there is a statutory requirement for investigators to ensure that there are grounds for instituting criminal proceedings for an offence relating to the overpayment.

4.4 Prosecutions (England & Wales): 4.4.1 If there is sufficient evidence the Department will refer the case to the Department’s

Prosecution Division for consideration of criminal prosecution where one or more of the following criteria are met:

♦ The gross adjudicated overpayment (including Housing and Council Tax Benefit) is £2,000 or over

♦ False identities or other personal details have been used

♦ False or forged documents have been used

♦ Official documents have been altered or falsified

♦ The person concerned occupied a position of trust

♦ The person concerned assisted or encouraged others to commit offences

♦ There is evidence of premeditation or organised fraud

♦ The customer had previously been convicted of benefit fraud

♦ The amount of the overpayment is under £2,000 and the offer of an administrative penalty or caution is not accepted.

4.4.2 In all cases, including those which do not fall within any of the above criteria, the

Department’s Prosecution Division retains discretion as to whether criminal proceedings are started.

4.4.3 The Department’s Prosecution Division is bound by the Code for Crown Prosecutors.

A copy of the Code can be obtained either on the CPS website www.CPS.gov.uk or from the CPS Communications Branch, 50 Ludgate Hill, London EC4M 7EX

5. Proceeds of Crime Act (POCA): 5.1 The Department has an active policy of referring all suitable cases for financial

investigation with a view to applying to the courts for restraint and/or confiscation of identified assets. A restraint order prevents a person from dealing with specified assets. A confiscation order enables the Department to seek to recover its losses from assets which are found to be the proceeds of crime.

6. Loss of Benefit Provision:

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6.1 The Loss of Benefit Provision is designed to be a deterrent against the continued abuse of the benefit system by applying a benefit sanction against those who commit benefit fraud.

6.2 This provision introduced by the Social Security Fraud Act 2001 allows the

Department to apply a sanction in the form of a fixed 13 week benefit disqualification period where a person is convicted of benefit fraud in two separate proceedings, which have been committed within a five year period.

6.3 The provision was extended by the Welfare Reform Act 2009 to include a new 4 week

loss of benefit sanction for all offences of benefit fraud which result in a criminal sanction (convictions, administrative penalties and cautions).

6.4 The existing 13 week loss of benefit sanction still applies to those who have been

convicted of benefit fraud in two separate proceedings, which have been committed within a five year period.

6.5 Benefits can be withdrawn, or reduced by 20 or 40 percent during the disqualification

period. 7. Recovery of Debt: 7.1 Where an overpayment arising from fraud is identified the Department takes steps to

recover the resultant debt, including taking action in the civil courts if necessary, in addition to any sanction it may impose in respect of that fraud.