Benefit Fraud

Common law, Fraud Act 2006, s.1, Social Security Administration Act 1992, s.111A, Social Security Administration Act 1992, s.112, Tax Credits Act 2002, s.35, Theft Act 1968, s.17
Effective from: 1 October 2014

Dishonest representations for obtaining benefit etc, Social Security Administration Act 1992 (section 111A)
Tax Credit fraud, Tax Credits Act 2002 (section 35)
False accounting Theft Act 1968 (section 17)
Triable either way
Maximum: 7 years’ custody
Offence range: Discharge – 6 years 6 months’ custody

False representations for obtaining benefit etc,  Social Security Administration Act 1992 (section 112)
Triable summarily only
Maximum: Level 5 fine and/or 3 months’ custody
Offence range: Discharge – 12 weeks’ custody

Fraud by false representation, fraud by failing to disclose information, fraud by abuse of position, Fraud Act 2006 (section 1)
Triable either way

Conspiracy to defraud Common law
Triable on indictment only
Maximum: 10 years’ custody
Offence range: Discharge – 8 years’ custody

User guide for this offence


Step 1- Determining the offence category

The court should determine the offence category with reference to the tables below. In order to determine the category the court should assess culpability and harm. The level of culpability is determined by weighing up all the factors of the case to determine the offender’s role and the extent to which the offending was planned and the sophistication with which it was carried out.

Culpability

Demonstrated by one or more of the following:

A – High culpability

  • A leading role where offending is part of a group activity
  • Involvement of others through pressure/influence
  • Abuse of position of power or trust or responsibility
  • Sophisticated nature of offence/significant planning

B – Medium culpability

  • Other cases where characteristics for categories A or C are not present
  • Claim not fraudulent from the outset
  • A significant role where offending is part of a group activity

C – Lesser culpability

  • Involved through coercion, intimidation or exploitation
  • Performed limited function under direction

Where there are characteristics present which fall under different levels of culpability, the court should balance these characteristics to reach a fair assessment of the offender’s culpability.

Harm – Amount obtained or intended to be obtained
Category 1 £500,000 – £2 million Starting point based on £1 million
Category 2 £100,000 – £500,000 Starting point based on £300,000
Category 3 £50,000 – £100,000 Starting point based on £75,000
Category 4 £10,000 – £50,000 Starting point based on £30,000
Category 5 £2,500 – £10,000 Starting point based on £5,000
Category 6 Less than £2,500 Starting point based on £1,000

Step 2 – Starting point and category range

Having determined the category at step one, the court should use the appropriate starting point to reach a sentence within the category range in the table below. The starting point applies to all offenders irrespective of plea or previous convictions.

Where the value is larger or smaller than the amount on which the starting point is based, this should lead to upward or downward adjustment as appropriate.

Where the value greatly exceeds the amount of the starting point in category 1, it may be appropriate to move outside the identified range.

Table 1

Section 111A Social Security Administration Act 1992: Dishonest representations to obtain benefit etc
Section 35 Tax Credits Act 2002: Tax Credit fraud
Section 17 Theft Act 1968: False accounting
Maximum: 7 years’ custody

Table 1: Benefit Fraud - Other offences
Culpability
Harm A B C
Category 1

£500,000 or more

Starting point

5 years 6 months’ custody

Starting point

4 years’ custody

Starting point

2 years 6 months’ custody

Starting point based on £1 million Category range

4 years’ – 6 years 6 months’ custody

Category range

2 years 6 months’ – 5 years’ custody

Category range

15 months’ – 3 years 6 months’ custody

Category 2

£100,000–£500,000

Starting point

4 years’ custody

Starting point

2 years 6 months’ custody

Starting point

1 year’s custody

Starting point based on £300,000 Category range

2 years 6 months’ – 5 years’ custody

Category range

15 months’ – 3 years 6 months’ custody

Category range

26 weeks’ – 2 years 6 months’ custody

Category 3

£50,000–£100,000

Starting point

2 years 6 months’ custody

Starting point

1 year’s custody

Starting point

26 weeks’ custody

Starting point based on £75,000 Category range

2 years’ – 3 years 6 months’ custody

Category range

26 weeks’ – 2 years 6 months’ custody

Category range

High level community order – 36 weeks’ custody

Category 4

£10,000–£50,000

Starting point

18 months' custody

Starting point

36 weeks’ custody

Starting point

Medium level community order

Starting point based on £30,000 Category range

36 weeks’ – 2 years 6 months’ custody

Category range

Medium level community order – 21 months’ custody

Category range

Low level community order – 26 weeks' custody

Category 5

£2,500–£10,000

Starting point

36 weeks’ custody

Starting point

Medium level community order

Starting point

Low level community order

Starting point based on £5,000 Category range

Medium level community order – 18 months’ custody

Category range

Low level community order – 26 weeks' custody

Category range

Band B fine – Medium level community order

Category 6

Less than £2,500

Starting point

Medium level community order

Starting point

Low level community order

Starting point

Band A fine

Starting point based on £1,000 Category range

Low level community order – 26 weeks' custody

Category range

Band A fine – Medium level community order

Category range

Discharge – Band B fine

 

Table 2

Section 112 Social Security Administration Act 1992: False representations for obtaining benefit etc
Maximum: Level 5 fine and/or 3 months’ custody

Table 2: Benefit Fraud - False representations for obtaining benefit etc
Culpability
Harm A B C
Category 5

Above £2,500

Starting point

High level community order

Starting point

Medium level community order

Starting point

Low level community order

Starting point based on £5,000 Category range

Medium level community order– 12 weeks’ custody

Category range

Band B fine –High level community order

Category range

Band A fine –Medium level community order

Category 6

Less than £2,500

Starting point

Medium level community order

Starting point

Band B fine

Starting point

Band B fine

Starting point based on £1,000 Category range

Low level community order – High level community order

Category range

Band A fine –Band C fine

Category range

Discharge –Band B fine

 

Table 3

Section 1 Fraud Act 2006 Conspiracy to defraud (common law)
Maximum: 10 years’ custody

Table 3: Benefit Fraud - Conspiracy to defraud
Culpability
Harm A B C
Category 1

£500,000 or more

Starting point

7 years’ custody

Starting point

5 years’ custody

Starting point

3 years’ custody

Starting point based on £1 million Category range

5 – 8 years’ custody

Category range

3 – 6 years’ custody

Category range

18 months’ – 4 years’ custody

Category 2

£100,000–£500,000

Starting point

5 years’ custody

Starting point

3 years’ custody

Starting point

15 months’ custody

Starting point based on £300,000 Category range

3 – 6 years’ custody

Category range

18 months’ – 4 years’ custody

Category range

26 weeks’ – 3 years’ custody

Category 3

£50,000–£100,000

Starting point

3 years’ custody

Starting point

15 months’ custody

Starting point

36 weeks’ custody

Starting point based on £75,000 Category range

2 years 6 months’ – 4 years’ custody

Category range

36 weeks’ – 3 years’ custody

Category range

26 weeks’ – 1 year’s custody

Category 4

£10,000–£50,000

Starting point

21 months’ custody

Starting point

1 year’s custody

Starting point

High level community order

Starting point based on £30,000 Category range

1 year’s – 3 years’ custody

Category range

High level community order – 2 years’ custody

 Category range

Low level community order – 26 weeks’ custody

Category 5

£2,500–£10,000

Starting point

1 year’s custody

Starting point

High level community order

Starting point

Medium level community order

Starting point based on £5,000 Category range

High level community order – 2 years’ custody

Category range

Low level community order – 26 weeks’ custody

Category range

Band C fine – High level community order

Category 6
Less than £2,500
Starting point

High level community order

Starting point

Low level community order

Starting point

Band B fine

Starting point based on £1,000 Category range

Low level community order – 26 weeks’ custody

Category range

Band B fine – Medium level community order

Category range

Discharge –Band C fine

 

Band ranges
Starting point Range
Fine Band A  50% of relevant weekly income  25 – 75% of relevant weekly income
Fine Band B  100% of relevant weekly income  75 – 125% of relevant weekly income
Fine Band C  150% of relevant weekly income 125 – 175% of relevant weekly income
Fine Band D  250% of relevant weekly income 200 – 300% of relevant weekly income
Fine Band E 400% of relevant weekly income 300 – 500% of relevant weekly income
Fine Band F  600% of relevant weekly income  500 – 700% of relevant weekly income
Community orders table

The seriousness of the offence should be the initial factor in determining which requirements to include in a community order. Offence-specific guidelines refer to three sentencing levels within the community order band based on offence seriousness (low, medium and high). See below for non-exhaustive examples of requirements that might be appropriate in each.

At least one requirement MUST be imposed for the purpose of punishment and/or a fine imposed in addition to the community order unless there are exceptional circumstances which relate to the offence or the offender that would make it unjust in all the circumstances to do so. For further information see the Imposition guideline.

A suspended sentence MUST NOT be imposed as a more severe form of community order. A suspended sentence is a custodial sentence.

Low

Medium

High

Offences only just cross community order threshold, where the seriousness of the offence or the nature of the offender’s record means that a discharge or fine is inappropriate

In general, only one requirement will be appropriate and the length may be curtailed if additional requirements are necessary

Offences that obviously fall within the community order band

Offences only just fall below the custody threshold or the custody threshold is crossed but a community order is more appropriate in the circumstances

More intensive sentences which combine two or more requirements may be appropriate

Suitable requirements might include:

  • Any appropriate rehabilitative requirement(s)
  • 40 – 80 hours of unpaid work
  • Curfew requirement for example up to 16 hours per day for a few weeks
  • Exclusion requirement, for a few months
  • Prohibited activity requirement
  • Attendance centre requirement (where available)

Suitable requirements might include:

  • Any appropriate rehabilitative requirement(s)
  •  80 – 150 hours of unpaid work
  • Curfew requirement for example up to 16 hours for 2 – 3 months
  • Exclusion requirement lasting in the region of 6 months
  • Prohibited activity requirement

 

Suitable requirements might include:

  • Any appropriate rehabilitative requirement(s)
  • 150 – 300 hours of unpaid work
  • Curfew requirement for example up to 16 hours per day for 4 – 12 months
  • Exclusion requirement lasting in the region of 12 months

* If order does not contain a punitive requirement, suggested fine levels are indicated below:

BAND A FINE

BAND B FINE

BAND C FINE

Custodial sentences

The approach to the imposition of a custodial sentence should be as follows:

1) Has the custody threshold been passed?

  • A custodial sentence must not be imposed unless the offence or the combination of the offence and one or more offences associated with it was so serious that neither a fine alone nor a community sentence can be justified for the offence.
  • There is no general definition of where the custody threshold lies. The circumstances of the individual offence and the factors assessed by offence-specific guidelines will determine whether an offence is so serious that neither a fine alone nor a community sentence can be justified. Where no offence specific guideline is available to determine seriousness, the harm caused by the offence, the culpability of the offender and any previous convictions will be relevant to the assessment.
  • The clear intention of the threshold test is to reserve prison as a punishment for the most serious offences.

2) Is it unavoidable that a sentence of imprisonment be imposed?

  • Passing the custody threshold does not mean that a custodial sentence should be deemed inevitable. Custody should not be imposed where a community order could provide sufficient restriction on an offender’s liberty (by way of punishment) while addressing the rehabilitation of the offender to prevent future crime.
  • For offenders on the cusp of custody, imprisonment should not be imposed where there would be an impact on dependants which would make a custodial sentence disproportionate to achieving the aims of sentencing.

3) What is the shortest term commensurate with the seriousness of the offence?

  • In considering this the court must NOT consider any licence or post sentence supervision requirements which may subsequently be imposed upon the offender’s release.

4) Can the sentence be suspended?

  • A suspended sentence MUST NOT be imposed as a more severe form of community order. A suspended sentence is a custodial sentence. Sentencers should be clear that they would impose an immediate custodial sentence if the power to suspend were not available. If not, a non-custodial sentence should be imposed.

The following factors should be weighed in considering whether it is possible to suspend the sentence:

Factors indicating that it would not be appropriate to suspend a custodial sentence

Factors indicating that it may be appropriate to suspend a custodial sentence

Offender presents a risk/danger to the public

Realistic prospect of rehabilitation

Appropriate punishment can only be achieved by immediate custody

Strong personal mitigation

History of poor compliance with court orders

Immediate custody will result in significant harmful impact upon others

The imposition of a custodial sentence is both punishment and a deterrent. To ensure that the overall terms of the suspended sentence are commensurate with offence seriousness, care must be taken to ensure requirements imposed are not excessive. A court wishing to impose onerous or intensive requirements should reconsider whether a community sentence might be more appropriate.

Pre-sentence report

Whenever the court reaches the provisional view that:

  • the custody threshold has been passed; and, if so
  • the length of imprisonment which represents the shortest term commensurate with the seriousness of the offence;

the court should obtain a pre-sentence report, whether verbal or written, unless the court considers a report to be unnecessary. Ideally a pre-sentence report should be completed on the same day to avoid adjourning the case.

Magistrates: Consult your legal adviser before deciding to sentence to custody without a pre-sentence report.

For further information and sentencing flowcharts see the Imposition guideline.

The table below contains a non-exhaustive list of additional factual elements providing the context of the offence and factors relating to the offender.

Identify whether any combination of these or other relevant factors should result in any further upward or downward adjustment from the starting point.

Consecutive sentences for multiple offences may be appropriate where large sums are involved.

Factors increasing seriousness

Statutory aggravating factors

  • Previous convictions, having regard to a) the nature of the offence to which the conviction relates and its relevance to the current offence; and b) the time that has elapsed since the conviction
  • Offence committed whilst on bail

Other aggravating factors

  • Claim fraudulent from the outset
  • Proceeds of fraud funded lavish lifestyle
  • Length of time over which the offending was committed
  • Number of false declarations
  • Attempts to conceal/dispose of evidence
  • Failure to comply with current court orders
  • Offence committed on licence
  • Offences taken into consideration
  • Failure to respond to warnings about behaviour
  • Blame wrongly placed on others
  • Damage to third party (for example as a result of identity theft)

Factors reducing seriousness or reflecting personal mitigation

  • No previous convictions or no relevant/recent convictions
  • Remorse
  • Good character and/or exemplary conduct
  • Serious medical condition requiring urgent, intensive or long term treatment
  • Legitimate entitlement to benefits not claimed
  • Little or no prospect of success
  • Age and/or lack of maturity where it affects the responsibility of the offender
  • Lapse of time since apprehension where this does not arise from the conduct of the offender
  • Mental disorder or learning disability
  • Sole or primary carer for dependent relatives
  • Offender co-operated with investigation, made early admissions and/or voluntarily reported offending
  • Determination and/or demonstration of steps having been taken to address addiction or offending behaviour
  • Offender experiencing significant financial hardship or pressure at time fraud was committed due to exceptional circumstances

Step 3 – Consider any factors which indicate a reduction, such as assistance to the prosecution

The court should take into account sections 73 and 74 of the Serious Organised Crime and Police Act 2005 (assistance by defendants: reduction or review of sentence) and any other rule of law by virtue of which an offender may receive a discounted sentence in consequence of assistance given (or offered) to the prosecutor or investigator.

Step 4 – Reduction for guilty pleas

The court should take account of any potential reduction for a guilty plea in accordance with section 144 of the Criminal Justice Act 2003 and the Guilty Plea guideline.

Step 5 – Totality principle

If sentencing an offender for more than one offence, or where the offender is already serving a sentence, consider whether the total sentence is just and proportionate to the overall offending behaviour.

Step 6 – Confiscation, compensation and ancillary orders

The court must proceed with a view to making a confiscation order if it is asked to do so by the prosecutor or if the court believes it is appropriate for it to do so.

Where the offence has resulted in loss or damage the court must consider whether to make a compensation order.

If the court makes both a confiscation order and an order for compensation and the court believes the offender will not have sufficient means to satisfy both orders in full, the court must direct that the compensation be paid out of sums recovered under the confiscation order (section 13 of the Proceeds of Crime Act 2002).

The court may also consider whether to make any ancillary orders.

Step 7 – Reasons

Section 174 of the Criminal Justice Act 2003 imposes a duty to give reasons for, and explain the effect of, the sentence.

Step 8 – Consideration for time spent on bail

The court must consider whether to give credit for time spent on bail in accordance with section 240A of the Criminal Justice Act 2003.