Budget Special: `Spend to save' clampdown on benefit fraud

An extra pounds 470m is to be spent by the Department of Social Security cracking down on benefit fraud as part of the Government's "spend to save" programme announced in the Budget. Single parents have also been targeted in an effort by ministers to present the Conservatives as the party of the family.

The extra amounts paid to lone parents on benefit to reflect their child care burden are to be abolished together with the child benefit supplement paid to single parents, though not for eighteen months, well after the next election.

Lone parents are to be specially targeted in the Department of Social Security's crack down on fraudulent claims as part of what Social Security Secretary Peter Lilley called the Government's "even-handed treatment of one and two parent families." Mr Lilley said the extra pounds 470m would be spent to augment his department's existing programme of checks and investigation.

The new money will be used to increase the visits paid by officials to claimants in "high-risk groups". These include lone parents, couples claiming housing benefit who claim to be living apart, and the unemployed suspected of having jobs on the side.

Altogether new claimants can expect an extra 1.3 million more visits in 1996-97 on top of the additional 300,000 visits checking on claimants already on the DSS Benefits Agency's books. Mr Lilley claimed the fraud initiative would be saving over pounds 2bn a year by the turn of the century. The new money brings to pounds 900m the amount being spent over the next three years on cracking down on benefit fraud. The Government expects the measures to produce savings of around pounds 7bn.

The Government's intention is to equalise levels of assistance for lone parents and couples with children, so cutting the alleged incentive the system gives young women to have children and rely on state benefits. The single parents' lobby reacted with concern. The National Council for One Parent Families said the measures were perverse and would make it harder for lone parents to get a job and move off benefits.

Last year's other target groups - young people living away from home and asylum seekers - have escaped special attention. But single people claming housing benefit - many of them younger - will see their eligibility reduced. Some 65,000 people will lose some of the government assistance they currently get in paying council tax.

The pounds 5.20 a week "premium" paid to lone parents was frozen in Kenneth Clarke's last budget and again will not be increased in value. From April 1998 it will no longer be paid to lone parents entering the benefits system though existing claimants will continue to receive it. One-parent benefit - which is to remain at its existing level of pounds 6.30 a week - is paid as of right in addition to child benefit: this will also start to disappear in 1998.

These cuts may have knock-on effects for some of the other benefits for which lone parents qualify, such as housing benefit and help with payments of council tax. Some lone parents could see themselves worse off by up to pounds 10.70 a week, according to Karin Pappenheim of the National Council for One Parent Families.

All social security claimants face a tougher assessment as part of a joint programme by the Department of Social Security, Customs and Excise and the Inland Revenue to crack down on fraud. The rules restricting exchange of information between tax authorities and the DSS are to be liberalised.

Alongside the uprating of various benefits, the DSS intends to tighten up the way they are administered. The rules governing claims for Disability Living Allowance and Jobseekers' Allowance (which is being introduced to replace income support for large numbers of people of working age) will put more onus on claimants to lodge an application with specific timetables.

Income related benefits are to increase in general by 2.6 per cent from April next year - in line with the established index which takes as its benchmark inflation in September. Eligibility rules for certain benefits are also to be tightened. People claiming housing benefit who share their homes with other people may get less. Certain private sector tenants claiming housing benefit will also see some reduction in their claims. People living in more expensive properties will get less council tax benefits. The rent levels on which single people make claims for housing benefit will be tightened.

"Expenditure on housing benefit and council tax benefit is set to rise 7 per cent ahead of inflation over the next three years. I believe it would be irresponsible if we allowed this growth to continue unchecked," Mr Lilley said.