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Social Security Fraud Act 2001

Offence of failing to notify a change of circumstances


174.This Clause amends sections 111A and 112 (1A) of the Social Security Administration Act 1992 (both of which were inserted by the Social Security Administration (Fraud) Act 1997). Before the 1997 Act the only specific offence for social security fraud was a summary offence of obtaining benefit by making a false statement or producing a false document (section 112). The 1997 Act created a new either way offence (section 111A) of dishonestly (or, in Scotland, knowingly) making a false statement or producing a false document with a view to obtaining benefit.

175.In addition, the 1997 Act introduced new offences aimed primarily at beneficiaries who receive payment of benefit by automated credit transfer (ACT).  Those paid by girocheque or order book sign a statement, whenever they obtain payment, to the effect that the circumstances remain unchanged.  If it subsequently transpires that the circumstances have indeed changed without being notified to the DSS or an authority administering Housing Benefit or Council Tax Benefit, the person could be charged under the false statement provisions of section 111A or section 112.  Those paid by ACT cannot be charged under these provisions because there is no false statement as such – payment is made directly into an individual’s bank account without any signature or other action being required on their part.  A similar difficulty arose in cases where the period of fraudulent activity extended over many years.  In such cases the evidence afforded by signatures on order book and girocheque counterfoils was commonly no longer available.  Previously the DSS had had to rely on specimen false statements spanning the period in question, which could give the court a misleading picture of the gravity of the offence.

176.The 1997 Act sought to remedy this situation by adding offences of omission to the existing offences of commission.   The new approach was to make it an offence in section 111A to fail to notify a change of circumstances which regulations under the Social Security Administration Act 1992 required the person to notify.  The same form of wording was also used in defining the summary offence in section 112(1A). Unfortunately, problems were identified with this approach.  It proved an impossible task to draft regulations which set out the various changes in circumstances which would inevitably affect any individual’s entitlement to any given benefit.  This Act provides the first opportunity to revisit the primary powers in order to secure the original policy intention.

177.The proposed changes restructure the provision so that the offences are defined in terms of changes that a person knows will affect entitlement to benefit, rather than to changes that regulations require him to report.  As increasing numbers of beneficiaries opt to receive payment of social security benefits through ACT, the need for this change has become greater.

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