Page last updated at 00:45 GMT, Friday, 24 April 2009 01:45 UK

Expat benefits cheats soak up sun

By Jenny Hill
BBC News, Benalmadena, Spain

Life on the Costa del Fraud

The government says benefit fraud by people living abroad costs UK taxpayers £63m a year - and is extending a hotline scheme to report them.

Every year thousands of visitors come to enjoy the sparkling coastline and bright sunshine.

Many of the people who live here are British pensioners who have decided to retire abroad.

The streets are lined with English bars and restaurants and it is easy to pick out the expats sitting in the afternoon sun enjoying a beer.

But this is also where the benefit cheats hide.

We came to the Costa del Sol to investigate claims that some of those British expats are claiming UK benefits to which they are not entitled.

They're leeches on both societies
Michel Euesden, Euro Weekly News

One man near Marbella said he had lived in Spain for years and had found it easy to fund his lifestyle with illegal handouts.

He explained how he got help after answering an advert in a newspaper that offered to help people fill in claim forms.

"The clue of getting benefits was to fill in the forms properly, to know what to put down. And he had a business where he filled the forms in for you. He got you not only your benefits but back pay as well."

Expats are allowed to claim some UK benefits like pensions and heating allowance.

But in Benalmadena some business owners and residents say many people make false claims too. The majority of the people said they knew of someone who cheated the system.

Dancing claimants

Steven Philips runs a sports bar. He said: "I know people who own houses - council houses - and rent them out."

In another bar down the road Gary Marsh says: "There's people I know who claim disability allowance who certainly go into the local offices in wheelchairs, who you see down here dancing in the winter months."

The Department for Work and Pensions (DWP) claims that so-called "abroad fraud" costs the UK taxpayer £63m a year.

Officials do not know how many people are making illegal claims or where they all live, but they believe the majority are in Spain.

Martin Fitches from the DWP told us "There are one million people here and the vast majority are law-abiding - so we're working with them to catch the people who are stealing British taxpayers' money."

Gary Marsh
Gary Marsh says some people claiming disability are later seen dancing in bars

The DWP has extended its hotline scheme and hopes residents will report their suspicions.

Originally set up in Alicante, it will now cover the Costa Del Sol and the Canary Islands.

Many people may well get in touch. At the Euro Weekly News they have lost count of the letters they receive complaining about benefit cheats.

The weak pound has affected most expats in the area and those struggling to exist on a devalued UK pension are angry.

The owner of the paper, Michel Euesden, said: "They're leeches on both societies and it's not for the Spanish government to stop them. It's for [the UK] government to stop them."

Just last month a British couple were jailed for claiming benefits while they sailed round the world in a luxury yacht.

The case was widely reported but seems to have had little impact as a deterrent in Spain.

As one benefit cheat admitted: "Everyone else is doing it - why shouldn't I?"

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