Universal Credit warning as fraudsters take advantage of £1,500 loophole

Officials have warned that callous fraudsters are trying to rip off benefit claimants trying to cash in on a Universal Credit loophole.

Struggling households this year have been able to get three advanced Universal Credit payments of £1,500 to deal with the fallout of Covid-19.

But a glitch in the system has allowed claimants to obtain several of the loans even though they are not entitled to the cash.

Now a stark warning has been posted that con artists are targeting benefit claimants who are wanting to exploit the system.

Fraudsters posing as job centre staff or personal loan advisors offer fake information in return of a £500 cut of the advanced payment, Birmingham Mail reports.

The loophole led to a flurry of fraudulent claims for advance payments and was widely shared on social media.

A Department for Work and Pensions spokesperson told Birmingham Live: "The vast majority of claims to Universal Credit are legitimate and fraud and error in the benefits system remains very low with 96.5 per cent of benefits paid correctly.

"We continue to monitor and investigate emerging fraud threats and pursue those seeking to rip off the taxpayer using the full range of our powers, including prosecuting and tough financial penalties."

The DWP says it now has dedicated teams to investigate specific types of fraud.

Up to 600 investigators scour claims as part of the Enhanced Checking Service.

It means benefit processing staff refer any suspicious cases for a more detailed review to spot any abuses of the system.

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How to legitimately get extra cash on top of Universal Credit

The DWP runs several schemes for benefit claimants needing additional money following the impact of the pandemic.

And a number of extra payments are available in specific circumstances, with top-ups of up to £405 from this October to replace the old Severe Disability Premium.

Claimants who used to get SDP will see their Universal Credit payments increased by £120, £285 or £405 next month, if they are eligible.

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

Advance Payment

Advance payments up to the amount of the first expected payment are available while waiting for the first payout of Universal Credit if you need money to cover bills and other household expenses.

You can apply for an advance payment in your online account or through your Jobcentre Plus work coach.

You will need to explain why you need an advance and verify your identity.

And claimants will need to provide bank account details for the advance.

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

It's also possible to get an advance if you are already being paid Universal Credit and have told the DWP of a change in your circumstances that means you are due to receive more money, but have not yet been paid the increased amount.

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