Welfare cheats who repeatedly make false claims will lose their benefits altogether under tough new Government rules.
Work and Pensions Secretary Iain Duncan Smith plans to impose a ‘three strikes and you’re out’ rule that will bar serial cheats from receiving handouts for three years.
He says he wants to send a ‘very strong message’ to false claimants who currently cost the taxpayer more than £5?billion a year. ‘We need to target benefits at those people who need it the most,’ an aide said.
‘This makes our intentions crystal-clear.’
However, there was confusion last night over whether bogus claimants would really lose all their benefits if caught out three times.
Asked whether the rules would mean that jobless fraudsters would be left with no income, some DWP officials initially insisted that their benefits would be axed ‘completely’.
‘It will be a flexible measure, depending on whether the fraudster has any dependants and the type of the fraud,’ she said.
‘In some cases, fake claimants can be successfully prosecuted but then still carry on receiving some benefits.
‘This measure is designed to hit the professional organised fraudsters the hardest.’
The move is part of a raft of measures from Welfare Reform Minister Lord Freud designed to catch benefit and tax cheats and slash the £192?billion-a-year social security bill.
- A new National Welfare Investigation Service of 200 sleuths.
- A mobile task force of investigators who can swoop on ‘hot spots’ of benefits abuse at a moment’s notice.
- Sharing data from public and private agencies to track professional fraudsters.
- Extra powers to seize the assets of benefit cheats.
‘When people are convicted we will get back the money we are owed, introduce tough punishments and strip the assets of criminal gangs.
My message to them is that benefit fraud is a crime that just doesn’t pay.’
The ‘three strikes’ idea was developed in America, where some states introduced a compulsory life sentence without parole for criminals convicted of serious offences on three separate occasions.
California extended the idea to lesser crimes, leading to people being jailed for life for crimes as minor as stealing a slice of pizza.
As part of his welfare overhaul, Mr Duncan Smith has pledged to introduce a new Universal Credit, giving claimants a single payment instead of the current array of benefits.
The amount received will taper off gradually once people return to work and their salaries increase.
He hopes that the streamlined system will also make it harder for benefit cheats to prosper.
The clampdown is revealed just three days before the Coalition Government announces the extent of cuts in its Comprehensive Spending Review.
As the deadline approaches, several Ministers are fighting a rearguard action to protect their budgets.
David Cameron will host a ‘cuts summit’ today at Chequers amid reports that Nick Clegg’s announcement of billions of pounds of extra help to poor school pupils has sparked a row.
It has been claimed that the Deputy Prime Minister announced the £7?billion ‘Pupil Premium’ even though fellow Liberal Democrat Danny Alexander, the Treasury Chief Secretary who is masterminding the cuts, had not agreed on its funding.
Mr Clegg is said to have pressured Mr Cameron and Chancellor George Osborne into agreeing to the pledge, leading to frantic requests to other departments for additional last-minute cuts to pay for it – angering Ministers who had already seen their budgets slashed.
The disarray deepened when plans to spare schools from other cuts were leaked to the BBC on Friday night. Mr Cameron had wanted to announce the move on Wednesday to soften the blow of savage cutbacks. It was claimed the leak came from ‘rogue elements’ in the Coalition.
A Whitehall source said: ‘Clegg was badly stung by Lib Dem hostility over the rise in university tuition fees and wanted to claim ownership of something positive to satisfy
his Party. Pupil Premium was ideal.
Cameron and Osborne approved it while the Treasury was still wrangling over who would pay for it.’
Treasury officials denied there had been any fallout and said the Pupil Premium had been fully costed. But that was disputed by other Ministers.
‘We knew nothing about it until very late on,’ said one.
The Prime Minister hopes to put the final touches to the £80?billion package of cuts over lunch today with Mr Clegg, Mr Osborne and Mr Alexander.
The cuts are the biggest since the Twenties and are £32?billion more than planned by Labour.
Dozens of road projects face the axe, frontline policing will be cut back and some prisons could be closed.
Universities also face a £3?billion cut in Government aid for teaching.
Several Ministers have taken the talks to the wire. Sources close to Culture Secretary Jeremy Hunt, who was originally asked to find cuts of up to 40 per cent, said he had yet to do a deal with Mr Osborne.
‘We are negotiating over the final details,’ said one MP.
By SIMON WALTERS AND GLEN OWEN, Daily Mail