Fraud - What happens to people who commit benefit fraud?

Prosecution

Anyone convicted in either the Magistrates Court or Crown Court will have a criminal record. Not all cases are referred to the courts for prosecution and less serious cases may be dealt with administratively, either by way of a Formal Caution or an Administrative Penalty.

Formal Caution

When a person admits to committing an offence and the loss to public funds is not too excessive a formal caution may be offered. A formal caution is a written warning similar to a police caution but is held on record only by the Local Authority and the Department for Work and Pensions. If a person re-offends the caution will be taken into account if the case is considered for prosecution.

Administrative Penalty

If a formal caution cannot be offered another alternative to prosecution is an Administrative Penalty. This is a financial penalty, similar to a fine, and is set by legislation at 30% of any overpayment of benefit. When a person accepts an Administrative Penalty they are required to repay the overpayment and the Administrative Penalty. Unlike a formal caution a person does not have to admit committing an offence to be offered an administrative penalty. However the Council must have sufficient evidence and be able to refer the case for prosecution, if the administrative penalty is refused. This penalty is also taken into account if the person re-offends.