Explanatory Notes

Summary and Background

Benefit fraud: the “two strikes” rule

30.The report by Lord Grabiner QC entitled “The Informal Economy” (2000)(6) concluded that the Government should consider introducing new ways to tackle those who are involved in the hidden economy, including a “two strikes and you’re out” approach for those convicted more than once of social security benefit fraud.

31.Following this report, the loss of benefit provisions, better known as “two strikes”, were put in place by the Social Security Fraud Act 2001. They provide that certain specified benefits can be reduced or withdrawn where a person commits a benefit offence, of which he is later convicted, within three years of a conviction for a previous benefit offence.

32.Following a review by the Department for Work and Pensions of the benefit fraud sanctions regime it was concluded that the provisions should be extended.

33.Section 49 extends the period between the date of conviction in the earlier proceedings and the date of commission of the offences in the later proceedings from three to five years. This will have the effect that a person’s benefit may be withdrawn or reduced if they commit a benefit offence, of which they are later convicted, within five years of a conviction for a previous benefit offence. No changes are being made either to the sanction or to the ability to request or make hardship payments.