Friday 6 November 2009

Shannon Matthew's mum's former partner's sister's benefit fraud

From The Metro:

Mother-of-two Amanda Hyett admitted claiming a range of benefits while failing to tell the authorities she lived with her husband, bus driver Neil Hyett.

... Craig Hassall, prosecuting, told the court how Hyett had claimed benefits apparently legitimately from November 2002 when she told the Benefits Agency she had split up from her then partner, Neil Hyett.

Mr Hassall said the offending began in May 2004 when she married Mr Hyett, but failed to tell the authorities about this and that they were living together.

In 2006 Hyett stopped claiming benefits and, in an interview at the time, Mr Hyett told staff "they had tried to go legit". But, Mr Hassall said, he later admitted they could not afford to forgo the benefits and his wife began claiming again three months later. The prosecutor said the defendant continued to tell officials her husband did not live with her and she did not know what his address was.

Mr Hassall said the fraud lasted for about four years and amounted to £35,885.27.


Textbook!

That works out at about £9,000 a year, or £180 a week.

If we refer to DWP's Tax Benefit Model Tables, we see that an unemployed single mother with two kids in social housing has a weekly income after housing costs of £202.30 (Table 2.1a).

As a bus-driver, Mr Hyett might earn £250 per week (that seems very low, in London it's more like £500 a week, but let's stick with that), and would have a take-home pay of £211.19 (Table 1.1b), so as long as they get away with it, the families weekly disposable income is £413.49.

Now, what happens if he 'fesses up to living with the mother? For that we refer to Table 1.6b. With weekly earnings of £250, the family's net income after housing costs would be £283.60. In other words, they would lose the princely sum of £129.89* per week, or nearly one-third of their disposable income by being honest.

Hands up if you can't see a) how tempting it must be; b) how easy it is to perpetrate such a fraud; and c) how bloody stupid the system is.

* Her weekly fraud averages out at £180 per week - I'm not sure where the other £50 a week comes from, but hey...

4 comments:

Ed said...

and d) how a CBI would eliminate this problem.

James Higham said...

Hand's up. The message is clear.

Bill Quango MP said...

I know you've done this before but I've forgotten the solution.
Raised tax thresholds or a single payment per person regardless of married/unmarried/cohabiting status?

Mark Wadsworth said...

BQ, the solution is what Ed says, universal benefits regardless of everything (except actually being a legally resident British citizen).

To save 'churn', you can trade in your entitlement to a higher personal allowance, so it's either/or - you choose EITHER a flat £70 a week cash benefit and pay tax on all your income; OR a personal allowance of £11,500 per annum (assuming a tax rate of 31%, i.e. 20% tax plus 11% NI).