DWP issues warning as Universal Credit fraudsters look for extra cash loopholes

DWP issues warning as Universal Credit fraudsters look for extra cash loopholes

The Department of Labor and Pensions has issued a fraud warning to universal loan applicants who may be looking for ways to get extra money during the coronavirus pandemic.

Some families were able to take advantage of a flaw in the Universal Loan that allowed them to receive advance payments of £ 1,500 on up to three separate occasions.

A bug in the online application process, which has since been resolved, allowed applicants to obtain several of these universal credit loans even though they were not eligible for the money.

Applicants usually tried to find extra money and were approached by scammers posing as employment office workers or personal credit counselors.

In exchange for helping them enter false information, the scammers cut the £ 1,500 prepayments by £ 500 each.

The flaw in the system resulted in a flurry of fraudulent advance payment claims and it became widespread on social media.

Recently there has been renewed interest in looking for ways to raise additional money, possibly due to financial pressures from the coronavirus pandemic.

A DWP spokesman said: “The vast majority of universal credit claims are legitimate and fraud and errors in the benefit system are still very low at 96.5 percent of properly paid benefits.

“We continue to monitor and investigate emerging fraud threats and prosecute those who try to rip the taxpayer apart using all of our powers, including law enforcement and hard fines.”

The DWP claims they now have dedicated teams investigating certain types of fraud.

To reduce the risks, DWP has set up an expanded screening service that includes 600 trained fraud investigators.

This means that service handlers will refer suspicious cases for further investigation and additional review. This service has advanced the fight against potential abuse of the system, according to the DWP.

The department also works with online sites to close down posts promoting fraud.

And it uses social media to raise awareness of fraud and remind people of the importance of protecting their identities.

DWP previously confirmed to Birmingham Live that it had put measures in place to combat widespread performance fraud across the UK.

Advance credit scams are believed to total £ 20 million, with up to 10,000 cases occurring each month.

DWP officials said the cash flowed out “like lottery jackpots” at £ 1,500 a time, with many of the claims obviously using false names.

How to rightly get extra money on top of the universal loan

The DWP runs a number of schemes for beneficiaries who need extra cash.

A number of additional payments are also available in certain circumstances. From October, up to £ 405 will be charged to replace the old severely disabled premium.

Eligible beneficiaries who previously received SDP will increase their Universal Loan payments by £ 120, 285 or 405 for the next month if eligible.

Other boosts are available for those who are self-isolating in Covid hotspots or have been instructed by NHS Test and Trace to self-isolate.

But there is more general financial help too – here’s what you can ask for:

1. Prepayment

Prepayments You can wait for the full amount of the first expected payment while waiting for the first Universal Loan disbursement if you need money to cover bills and other household expenses.

You can request an advance payment in your Online account or via your Jobcentre Plus work trainer.

You will need:

  • Explain why you need an advance payment
  • Verify your identity (you do this when applying to a work coach online or by phone).
  • Provide the bank account details for the advance payment (speak to your work coach if you cannot open an account).

You must return the money via deductions from your Universal Credit payments within 12 months.

It is also possible to receive an advance if you have already received a universal loan and have notified the DWP of a change in your circumstances, which means that you need to receive more money but have not yet received the increased amount.

2. Budget advance

Alternatively, you may be able to get one Budget advance to help with:

  • Household emergencies like replacing a broken stove
  • get a job or stay at work
  • Funeral expenses

A budget advance is a loan that you must repay over your regular universal loan payments. Your payments will be lower until you pay it back.

The smallest amount you can borrow is £ 100. You can stand up:

  • £ 348 if you are single
  • £ 464 when part of a couple
  • £ 812 if you have children

How much you can get depends on whether you:

  • can repay the loan
  • Have savings over £ 1,000 (the DWP will reduce the loan offer for you by £ 1 for every £ 1 saved above the £ 1000 threshold)

To receive a budget advance, you must have:

  • You have been on Universal Loans, Income-Related Employment and Support Allowances, Income Support, Income-Related Unemployment Allowance, or State Pension Allowance for 6 months or more, unless you need the money to start a new job or keep an existing job
  • has made less than £ 2,600 (£ 3,600 combined for couples) in the past 6 months
  • paid all previous budget advances

To apply for a budget advance, contact your local Jobcenter Plus-Arbeitscoach.

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3. Budgeting Loans

Beneficiaries can also ask for a Budgeting loan However, this is not a system that is available to those with universal credit.

To be eligible for a budgeting loan, you must have received one or more of these benefits in the past six months:

  • social care
  • Income-related unemployment benefit
  • Income-related employment and support allowance
  • Pension credit

You cannot get a budgeting loan if:

  • You are currently taking out universal credit – request a budget advance instead
  • You are involved in industrial action (e.g. strike, strike or lockout).
  • You owe a total of more than £ 1,500 on crisis and budgeting loans



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