Claims not of this world

With nearly 12 million pensioners in the UK and 7.5 million workplace pensions being paid, the scope for pension fraud “from beyond the grave” is vast. Pension fraud is more common than you might expect.

According to one survey of private pension schemes, one in 100 spouses, partners, close relations or friends fail to inform pension schemes when members die and most pension schemes require members to confirm in writing only once a year that they are still alive.

As a result, approximatley 110,000 people in the UK are claiming pensions for relatives who are no longer of this world. According to the DWP (Department of Work and Pensions), benefit fraud can arise from the giving of incorrect or misleading information, or failing to report a change in circumstances. Benefit fraud is a serious criminal offence that can lead to prosecution or a penalty. Even if fraud is not committed, overpayments may have to be repaid.

The sum overpaid by schemes could exceed £200 million a year in false pension claims. In most cases, overpayments are made for only a few months, but some false claims can last many years. On occasion, some frauds have only come to light when Buckingham Palace staff attempt to contact 100-year-old pensioners to deliver the Queen’s birthday messages, only to find that they died years before!

BEWARE: The next paragraph is not for the squeamish!

A gruesome tale

In a high-profile case in June 2011, television actress Hazel Maddock and her daughter Jasmine were convicted of unlawfully preventing the burial of Hazel’s 95-year-old mother, Olive Maddock. Hazel was also convicted of fraudulently obtaining her dead mother’s state pension and pension credit. On 1 July, Hazel was sentenced to 11 months in jail for leaving her mother’s body unburied for up to six months. For failing to bury her grandmother, Jasmine received a 26-week prison sentence, suspended for two years, along with 250 hours of unpaid community service.

Saints among sinners

While it’s easy to jump to conclusions about overpaid pensions, benefits and other payments made to these greedy ghouls, it must be remembered that not all overpayments are as a result of deliberate fraud.

It is important for pension schemes to conduct pensioner existence checks on a regular basis. If overpayments have been paid, whether a fraud has been committed or not, pension schemes should take advice on recouping overpayments and dealing with any fraudulent claims.