News

The money will not be repaid to Wokingham Borough Council by the couple after they entered into an Individual Voluntary Arrangement
advertisement

Benefit cheats won't have to repay £25k to council

By Victoria Smith
December 21, 2011

Benefit fraudsters will not have to repay nearly £25,000 they falsely claimed from taxpayers’ coffers after council bosses wrote off the debt.

The £24,976.04 of housing benefit money fraudulently claimed by a woman who claimed to be living alone, but who was actually living with her partner, will not be repaid in full to Wokingham Borough Council by the couple after they entered into an Individual Voluntary Arrangement (IVA).

These agreements are an alternative for people who want to avoid bankruptcy, and constitutes a formal repayment proposal presented to the debtor’s creditors.

However in this case, the council’s claims for the outstanding balance resulted in just £478.18 being repaid, which added to the £200 they had already paid before entering the IVA.

The couple were prosecuted after the council uncovered the claims, which were made between May 2005 and February 2008.

The council has received £9,990.42 from the Government’s housing benefit subsidy arrangement, which offers 40 per cent of the original overpayment value, however it will still be out of pocket.

The cash is a significant percentage of the estimated £300,000 to £350,000 in fraudulently claimed benefit payouts made by the council each year.

Kevin Mercer, head of revenues and benefits at the council, said the case was extremely rare.

He said: “Historically across all the areas we write off very low amounts.

“This is the first time this type of case has come before me.

“Because this person has come into IVA we have had to stop the action.

“It is frustrating. We are just like any other body that administers public money – we want to make sure it goes in the right amount to the right people.

“That’s why we work extremely hard to prevent and detect fraud.”

The council is investigating around a dozen cases at present and annually investigates around 250 cases.

It identifies around £300,000 to £350,000 of fraudulently claimed funds each year and takes action, which includes taking offenders to court, issuing fines or giving cautions, in around 10 per cent of cases.

Between April and November this year, the council took nine cases to court which resulted in successful prosecution.

The council is actively working to stamp our false housing and council tax benefit fraud.

And it also collected 99.3 per cent of the council tax required from residents last year – the highest of all unitary authorities in the country.

Mr Mercer added: “We want people to know that if you have a legitimate claim you can expect the money you are entitled to.

“But if you try to claim money in the wrong way, we will make every effort to find you and take action where appropriate.”

| Submit Comments | View Comments (8)

« Previous Story | Next Story »

Most recent user comments 8 of 8

Show 15 | 25 | 50 per page

It would seem that Wokingham Council is not to blame for accepting this criminals successful attempt of using an IVA to retain the proceeds of her criminal activity. Seemingly local authorities have no input and cannot refuse to accept an IVA agreement. Even though they may be the major debt holder. This seems to me to be a licence for criminals to retain profits derived from crime. For those interested in IVA a simple guide can be found here: http://images2.moneysavingexpert.com/attachment/ivaGuide.pdf I have been in contact with Wokingham MP and he is going to discuss this with the relevent ministers. The sooner the law is changed the better.

William Richards
22/12/2011 at 12:40

I hate to tell you, but this sort of thing is far more common than the man-on-the-street realises... For example, the average amount of rent owed to Wokingham Council Tenant Services (council tenants owing their rent) at any one time is over £300,000, despite the excellent efforts of the rent officers. And often tenants (travellers and settled folk) just disappear owing thousands, to a different borough (Reading, Bracknell, wherever) and are never held accountable. It's usually down to a lack of powers available to the council, but ultimately, those in charge lack the will to do anything differently.

Damiano_Tommassi, Wokingham
21/12/2011 at 15:46

Mr Mercer added: “We want people to know that if you have a legitimate claim you can expect the money you are entitled to.

“But if you try to claim money in the wrong way, we will make every effort to find you and take action where appropriate.”

But of course the action we took in this case was to enter into an IVA which effectively cancelled the debt. In 5 years this person will be debt free and Wokingham Councill will be £25000 short. Can Mr Mercer tell us WHO the Councill official was who signed this IVA on behalf of the hard working townsfolk of the borough?

William Richards
21/12/2011 at 14:38

It's very frustrating that I pay so much tax and struggle to get by while other people sit on their bums and get everything paid for them.

I guess Wokingham is better at collecting council tax than Bracknell - I haven't even had a reminder for mine.

CMA
21/12/2011 at 12:44

The council should have refused the IVA offer and held out for the full amount. If the couple had been made bankrupt so what. It's the law abiding tax paying folk of Wokingham who are once more been robbed, they will have to make up the shortfall, unless of course those council officials are going to pay it themselves.

William Richards
21/12/2011 at 12:42

Great idea !! Lets all get on the band waggon and get everything for free !! Strikes me that as taxpayers we are mugs.

true blue
21/12/2011 at 12:03

Why is it so easy for people to get free living, free houses, free cars in some cases, dont have to pay insurance....why would you care, dont have to go to work, dont need to save like mad for a pension and to pay off the mortgage, dont have to pay maintainance on property etc etc.... Sometimes I feel like a mug for actually being working class.