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Last Updated: Friday, 21 May, 2004, 06:20 GMT 07:20 UK
NI benefits fraud revealed
Most money was lost from pensions and bereavement funds

Fraud and official errors in pension and benefit payments totalled 53m in Northern Ireland last year, according to a report.

The report by the National Audit Office revealed that in just two years, losses through error and fraud had doubled, despite a series of counter-measures introduced by the government.

The Department for Social Development is responsible for administering the money which it gets from National Insurance contributions.

Most of the money was lost from retirement pensions and bereavement benefit.

An estimated 39.3m was overpaid in retirement pensions and bereavement benefits to people who did not qualify for the cash in 2002/03, compared to 7.9m in 2000/01.

The head of the National Audit Office, Sir John Bourn, said that as part of the next audit he will also examine the measures brought in to try and combat fraud and error.

Sir John said: "I have qualified this account because of high levels of estimated fraud and official error in the payment of benefits from the Northern Ireland National Insurance Fund.

"I note the measures being taken by the department to reduce fraud and error and will review progress as part of the my audit of the 2003/04 account to see whether the desired outcomes are being achieved."

Strategy introduced

The figures revealed that including Incapacity Benefit and Jobseeker's Allowance, the total losses due to fraud and error for the year were 53.2m - more than 20m up on the previous year.

This represents 4% of the total expenditure on benefits of 1,457m.

Incapacity Benefit accounted for 12.6m of the overpayment while Jobseeker's Allowance was just 0.1m.

The Department of Social Development introduced a strategy to prevent fraud and error in 2000/01.

The plan included measures to improve detection of fraud and sanctions imposed on deliberate offenders.

An internal review carried out two years later, confirmed that the Social Security Agency was not always applying it effectively.

The NAO report also revealed the levels of underpayment in benefits for the year 2002/03.

There was a total of 1.8m underpayment in Retirement Pension and Bereavement Benefit and 3.7m in Incapacity Benefit.

A statement from the department confirmed the Social Security agency was reviewing its processes.

It said the agency had already improved its ability to identify inaccuracies in the system and improvements were also being made to its systems, procedures and training as part of a major modernisation programme.

The statement added: "While the 53m stated by the National Audit Office is a very significant figure, it should also be noted that the overall accuracy for processing the benefits referred to in the report is around 96%."

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