Tens of thousands of people are fraudulently claiming benefits from overseas and costing British taxpayers almost half a billion pounds a year, The Mail on Sunday can reveal.
Department of Work and Pensions (DWP) data shows that £423 million in benefits was claimed by fraudsters living outside the UK in 2024/25.
The shocking figures sparked calls for ministers to ‘get a grip’ on benefits cheats and are a blow to the Government after reports it had saved £17 million by stopping 2,600 people wrongfully claiming Child Benefit while living abroad.
Experts warn this is ‘just the tip of the iceberg’ and that a tougher approach is needed to address the scale of the scandal.
The DWP figures show that £178 million was lost to people fraudulently claiming Universal Credit (UC) while living abroad, with £108 million of Pension Credit pocketed by overseas fraudsters.
Other benefits exploited include Housing Benefit and Personal Independence Payments.
Claimants can still receive these benefits for up to a month after moving abroad, but many are doing so for longer than the rules allow. The £423 million DWP figure does not include the amount lost to overseas Child Benefit claims, as this is administered by HMRC.
Last week the Government said it had identified 2,600 people who had left the UK but continued to claim the benefit. This represented 1.3 per cent of the 200,000 claimants who were randomly selected for investigation.
File image: Department of Work and Pensions (DWP) data shows that £423 million in benefits was claimed by fraudsters living outside the UK in 2024/25
Work and Pensions Secretary Liz Kendall (pictured) has branded the new The Public Authorities (Fraud, Error and Recovery) Bill the ‘biggest fraud crackdown in a generation’
There are currently 6.9 million families claiming Child Benefit, meaning tens of thousands of people could be fraudulently taking the payments while living abroad.
Parents are meant to inform the taxman if they leave the UK for more than eight weeks, but investigators found large numbers are not doing so.
Officials matched Child Benefit records with ‘international travel data’ to look for claimants who appeared to have moved abroad.
HMRC then carried out checks on those suspected. Its team of 15 investigators is being expanded to 200 in the hopes of recovering as much as £350 million in the next five years.
It is understood that the Government is soon to target other overseas benefits fraud to see if more money can be clawed back.
Joanna Marchong, investigations campaign manager of the TaxPayers’ Alliance, said: ‘Hard-pressed taxpayers will be outraged that benefits are still being pocketed by fraudsters overseas.
‘While ministers are finally starting to crack down on benefit fraud, this is clearly just the tip of the iceberg. With billions already being spent on welfare at home, every pound wasted on fraudulent or ineligible claims abroad is an insult to families struggling under the record high tax burden.’
Joe Shalam, policy director at think-tank The Centre for Social Justice, said: ‘For the sake of those who depend on our welfare system, and Britain’s ailing public finances, we must take a much tougher approach.’
Labour is planning new ways to tackle benefits fraud. The Public Authorities (Fraud, Error and Recovery) Bill currently going through Parliament will allow the DWP to recover cash directly from offenders’ bank accounts and it is hoped the measures will save £1.5 billion over five years.
Work and Pensions Secretary Liz Kendall has branded the new law the ‘biggest fraud crackdown in a generation’.
A Government spokesman said: ‘As with any other type of fraud, we robustly investigate any evidence that a customer might be claiming or receiving a benefit inappropriately from abroad.’
