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Social Security (Loss of Benefit) Amendment Regulations 2010

My Lords, I beg to move that the draft Social Security (Loss of Benefit) Amendment Regulations 2010, which were laid on 20 January 2010, be approved. I confirm that, in my view, the statutory instrument is compatible with the European Convention on Human Rights. These amending regulations support the tough new powers introduced by Section 24 of the Welfare Reform Act 2009, which widened and extended the existing loss of benefit powers contained within the Social Security Fraud Act 2001. Section 24 introduced a new four-week loss of benefit or "one strike" sanction for all first-time benefit fraud offences, not just for cases which result in convictions but also those which result in an administrative penalty or caution. The new "one strike" sanction is all about deterring people from committing benefit fraud in the first place. The Department for Work and Pensions paid out more than £135 billion in social security benefits last year. The vast majority of this money was paid out correctly to those who were entitled to it; however £1.1 billion is estimated to have been stolen through benefit fraud. So, although the department has an extensive and successful strategy to tackle benefit fraud, more still needs to be done. This new sanction will increase and strengthen the deterrent effect of the existing sanctions regime and stop more people committing benefit fraud in the first place. However, if someone does commit benefit fraud they will do so knowing that they face losing four weeks’ benefit on top of having to pay the money back and the risk of a criminal record. I reassure noble Lords that only benefit fraud cases which result in a conviction, an administrative penalty or a caution will be liable to the new sanction. Cases where the customer has simply made a mistake will not result in a loss of benefit sanction. Such cases are dealt with separately outside of fraud investigation. The existing loss of benefit sanction, sometimes referred to as "two strikes", will continue alongside the new provisions to maintain a tougher 13-week loss of benefit sanction for those few persistent repeat offenders who are convicted twice within five years. I turn now to the provisions in the draft regulations which set out the details of how the new sanction for benefit fraud offences will work. Almost all of the amending regulations reflect the existing Social Security (Loss of Benefit) Regulations 2001 and merely insert references to the new sections in the Social Security Fraud Act 2001. In particular, the details of which benefits are disqualifying and/or sanctionable, which are withdrawn or reduced and the hardship provisions all remain the same. This means that the same safeguards exist for customers who are vulnerable or seriously ill, and that the sanction cannot be applied to bereavement payments, retirement pension, benefits paid for children or those that cover the extra costs of disability. In addition, entitlement to "passported" benefits such as housing benefit, council tax benefit and free school meals is also unaffected, with specific references in the new regulations to income-related employment and support allowance and pension credit to ensure that "passported" housing and council tax benefit are not sanctioned at the same time as those benefits. Additionally, the regulations allow for statutory adoption pay, statutory paternity pay and the health in pregnancy grant to be excluded from the sanction. The introduction of the new provision also created an opportunity to simplify the existing process, and as a result the start date of the disqualification period for both one and two strikes has been aligned with the benefit payment period. The new sanction will apply only if a benefit offence was committed after the commencement of the new provision. There will be no retrospective effect. The new regulations also delete the reference in the existing regulations to a housing benefit sanction following eviction on grounds of anti-social behaviour, as this measure is no longer in force. Further changes take account of Section 33 of the Welfare Reform Act 2009, to explain when a jobseeker is not to be treated as a person in hardship. The new sanction will be included in a future Targeting Benefit Thieves media campaign, and customer notifications will be revised to ensure that customers are aware of the consequences of committing benefit fraud and the punishments that can be applied. In conclusion, last year over 56,000 benefit thieves knowingly withheld information or deliberately failed to report a change in their circumstances in order to steal money from the benefit system that is there to protect those who are most in need. We have a duty to protect the integrity of that benefit system and we remain committed to improve and build upon the good progress we have already made by reducing benefit fraud to half the level it was in 2001. This new loss of benefit sanction will help us do this. I therefore seek approval for the regulations, and I commend them to the House.