Internal Benefits Fraud at the Department for Work and Pensions

In the 2025-26 financial year, employees and contract staff of the Department for Work and Pensions (DWP) were found to have diverted benefits payments intended for unemployed, disabled and pensioner claimants. Internal investigations recorded 40 cases of benefits-related fraud, resulting in losses of £612,715, plus an additional £103,681 from separate salary and expense investigations. Over the past five years, staff misconduct has cost the department roughly £4 million.

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The DWP’s own figures show that staff-initiated fraud fell from £1.7 million in 2024-25 to the £716,396 total reported for 2025-26, a reduction the department attributes to tighter controls. By contrast, fraud committed by claimants amounted to £6.8 billion in the same period, a slight increase from £6.5 billion the year before. The department also noted that £1.2 billion owed to claimants remained unpaid due to administrative errors.

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The DWP, which employs about 85,000 full-time equivalents, said it treats fraud allegations “extremely seriously” and is cooperating with ongoing criminal proceedings. A spokesperson affirmed that anyone caught abusing their position “will be held to account with the full force of the law.” The department highlighted that robust controls have halved internal fraud compared with the previous year.

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Former pensions minister Ros Altmann described the continued theft as “shocking” and warned it diverts hard-earned taxpayer money from people in need. The Taxpayers’ Alliance argued the misconduct “makes a mockery of efforts to crack down on welfare abuse.” William Yarwood, the alliance’s campaigns director, urged ministers to recover the stolen funds, dismiss responsible staff and strengthen safeguards. Campaigner Shabaaz Mohammed of Manchester Disabled People Against Cuts called the level of staff fraud “shocking” and said it shows the focus has been on the wrong people.

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• “Clearly, the amount being stolen has fallen [since last year], but it is shocking that this kind of theft is still going on,” — Ros Altmann, former pensions minister

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• “Ministers must recover the money, sack anyone responsible and strengthen controls so the system protects taxpayers rather than being exploited by insiders.” — William Yarwood, campaigns director, Taxpayers’ Alliance

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• “It’s not a small amount and it could be going to be people who need it,” — Shabaaz Mohammed, campaigner, Manchester Disabled People Against Cuts

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• “Anybody caught abusing their position to fraudulently claim taxpayers’ money will be held to account with the full force of the law,” — DWP spokesperson

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