Daily Telegraph April 2003

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    The oldest swindlers in town

    They’re poor and beyond reproach, but many pensioners are on the fiddle with
    their housing benefit. James Trollope reports

    They fought for king and country, raised families and worked hard for most
    of their adult lives. Now, many of them are swindling thousands of pounds in
    housing benefit. It is almost heresy to criticise pensioners. That is why
    they have such an advantage if they decide to cheat the system. After all,
    what local council is going to risk taking them to court? Accusing grannies
    and grandads of fraud is hardly a vote-winner.

    The scale of the problem came to light while I was researching a television
    documentary, when officials described the difficulty of combating pensioner

    Take Liverpool. A few years ago, city council officials discovered they had
    overpaid nearly £1 million of housing benefit to hundreds of senior citizens
    who had failed to declare occupational pensions. In many cases, their rent
    was being paid for by the local taxpayers when, either through fraud or
    error, they clearly weren’t entitled to support. Scores of those who were
    defrauding the council, either knowingly or unintentionally, were questioned
    under caution. At which point, according to fraud manager Bernie Davies,
    “all hell broke loose”.

    “Pensioners’ groups, solicitors, local newspapers were all demanding to know
    why we were treating pensioners in this way. Resignations were called for
    and we were accused of acting disgracefully. Thankfully, the councillors
    backed us up.”

    Only a handful of those elderly cheats were ever prosecuted and nowadays, in
    Liverpool at least, anyone over the age of 65 is no longer questioned under
    caution. But, as the negative publicity began to fade away, there was one
    unexpected side-effect. Many pensioners who hadn’t originally been suspected
    came forward to confess. Yes, they too had kept quiet about pensions and
    hidden reserves of capital. And could they please now repay the benefit they
    had been falsely claiming?

    More than £10 billion of housing benefit is paid out by local councils each
    year to help one in every seven householders with their rent. The Government
    has pledged to cut fraud by a quarter by 2006 but that, as the National
    Audit Commission recently pointed out, is not going to be easy because no
    one knows exactly how much fraud there is. Some estimate that it could be as
    high as £1 billion a year, with pensioners responsible for about a third.

    “I’ve interviewed a lot of pensioners,” says fraud consultant Malcolm
    Gardner, “and, take it from me, they can be as wily as they come. If they
    are under suspicion, they often either pretend not to understand or turn up
    with a solicitor.”

    Before setting up his consultancy, Mr Gardner worked as a local authority
    investigator in Reading and York. Although he dealt with a lot of honest
    pensioners, others were adept at exploiting the system. He particularly
    recalls telling one elderly couple that they had too much capital to qualify
    for housing benefit (anyone with more than £16,000 is normally ineligible).

    “A few hours later they returned having bought a new car, which took their
    savings just below the limit,” he says. “Under the rules, if it had been a
    Ferrari or something equally extravagant, they could have been refused for
    ‘deprivation of capital’. But, as it wasn’t a luxury car, there was no
    reason to deny their application.”

    There is bending the rules and then there is what one sentencing magistrate
    called “a gross breach of trust”. He was talking about a pensioner from
    Fareham in Hampshire who was chairman of the district council’s planning and
    development committee – a position from which he was forced to resign when
    he was caught swindling his own council out of housing benefit and council
    tax relief. Liberal Democrat councillor Hugh Pritchard failed to declare two
    private pensions and was fined £300 after repaying the £1,200 he had

    But only about one in 400 of those suspected of housing benefit fraud are
    ever taken to court. Although investigators now have greater powers to check
    personal financial details, they also have to work within increasingly
    robust laws on human rights. Meanwhile, the Government is trying to persuade
    us, through an advertising blitz which has so far cost £14 million, that we
    should shop colleagues and neighbours whom we suspect of fraud. As well as a
    national hotline which fields 4,000 calls a week, most local councils have
    their own websites and telephone numbers dedicated to those who wish to

    Mr Davies says he is sure that most fraud managers would welcome much
    greater access to information and, in particular, more co-operation from the
    Inland Revenue to check claimants’ savings. “Although we are no longer
    thought of as a soft touch, in many areas our hands are still tied.”

    In Liverpool’s most recent check-up, investigators found that 3,500 people
    receiving local authority pensions were also claiming housing benefit. Some
    poorly paid former workers, such as dinner ladies, will be claiming
    legitimately, but others won’t. Almost a third were more than 90 years old.

    Mr Davies warns that in some cases cheats will be pursued beyond the grave.
    “Council tax records will tell us when someone dies and if they have been
    falsely claiming, we can try to recoup money from their estate.”


    A cheat is a cheat no matter how old they are, but I am concerend about the tone of some of this article

    First of all there is nothing at all wrong with refusing an interview under caution if a solicitor is not present. I have recently advised one of my own clients to do just that.

    As for deprivation of capital, the rules are or should have been clear for decades, if it can be shown that a claimants significatn operative purpose in expending capital wwas to secure benefit, then the deprivation rule comes into force, the intetion to secure benefit does not have to be the dominant purpose.

    O f course the burden of proof lies with the Council in showing that therewas deliberate deprivation, and thats just the way it should be.

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