Fraud Investigations - Civil penalty or prosecution?

Civil penalties

A civil penalty may apply if you are overpaid a benefit and:

• you have negligently given incorrect information or evidence, and
• you fail to take steps to rectify the error, and
• the error causes an overpayment, or
• you fail to provide information or evidence or fail to notify a change in your circumstances without a reasonable excuse.

You may be invited to pay a civil penalty as an alternative to criminal prosecution. This may apply if:

• you have been overpaid benefit and this is recoverable from you, and
• you caused the overpayment, and
• there are grounds for prosecuting you for the offence.

How much is the penalty?

The minimum penalty is the greater of 50% of the amount overpaid or £350, with a maximum penalty of £5,000.

If I agree to the penalty, can I still be prosecuted?

No. The penalty is an alternative to prosecution. If you agree to the penalty, you must be allowed a short ‘cooling-off’ period to change your mind. You cannot avoid the penalty after that time. The cooling-off period is 14 days.
 

If I pay the penalty, do I still have to repay the overpayment?

Yes. If the overpayment was recoverable, it remains recoverable from you even if you pay the penalty.

If I do not agree to the penalty, will I be prosecuted?

Not necessarily. Although there must be grounds to prosecute before you can be offered a penalty, you will not necessarily be prosecuted if you do not agree. You should always seek specialist advice.