Through social benefit programmes (SBP), governments protect individuals and families from economic and social risks, and help them lead a fulfilling life. The safety net that SBPs provide is crucial for ensuring societal well-being and a sustainable economy. For many, these programmes are a vital lifeline. Delivering SBPs means supporting businesses, households and individuals as they navigate dynamic labour markets, economic crises and changes in personal circumstances.
With social welfare expenditure representing 20 to 30 per cent of overall government spending in many OECD countries, it is essential that governments deliver SBPs effectively and efficiently. To this end, countering fraud in SBPs is critical for service delivery. Fraudulent schemes carried out by individual beneficiaries or private providers compromise the integrity of vital programmes and deprive people of essential services and social assistance. Although there are no reliable figures for global fraud levels, country-level data suggest that a significant amount of funds are lost as a result of fraud in SBPs. In the United Kingdom, for example, an estimated GBP 1.2 billion was lost from fraudulent overpayments of benefits in 2018/19. Although some of this money was later reclaimed, the amount of funds lost to fraud continues to increase each year.
Failing to counter fraud in SBPs can negatively affect public trust and undermine confidence in the government’s ability to manage and deliver benefits. Trust plays a crucial role in the effectiveness of government: high trust is associated with co-operative behaviour, and low trust with resistance. A lack of public trust can undermine a government’s legitimacy and jeopardise the success of public policies, programmes and regulations that rely on the co-operation of citizens. Ensuring the effectiveness and accountability of SBPs is more vital than ever in light of the increased demand placed on these programmes during the COVID-19 crisis. As many governments expand SBPs in areas such as health and income support, it is essential that they are equipped to prevent and detect fraud in an increasingly complex environment.
Mitigating risks of fraud in SBPs can help governments preserve trust while providing effective service delivery. Recognising the need to assess current approaches and provide policy makers and practitioners with insights on strengthening their anti-fraud measures, this report takes stock of what governments are doing to counter fraud in SBPs, and how they can improve. In line with the OECD Recommendation of the Council on Public Integrity, it focuses on preventive and detective measures, while highlighting the need to invest in the former to reduce the likelihood of fraud risks materialising at a later stage. The report explores how different actors involved in the management of SBPs can play a role in fraud prevention and detection, and how data-driven approaches are enhancing anti-fraud measures. The report also considers how governments can enhance evaluation of anti-fraud measures to help improve them. Finally, taking stock of the current state of play, it considers areas for deeper consideration and research.
This report was approved by the OECD Working Party of Senior Public Integrity Officials (SPIO) on 22nd June 2020 and declassified by the Public Governance Committee on 14th July 2020.