Benefit fraudsters who work while claiming handouts are to have their wages seized.
The crackdown aims to claw back £250million of taxpayers’ money paid out every year to people who are not entitled to it.
New powers which come into force on Monday mean it will no longer be necessary to go to court to get back the welfare payments. Instead investigators will be able to bypass the protracted and expensive legal process by seizing money directly from the cheats’ pay packets.
The move is the latest weapon in the fight against a cynical minority who see the benefits system as a limitless cash machine. Although £250million is a relatively small proportion of Britain’s annual £208billion welfare bill, it is a crucial part of the Government’s “get tough” approach.
Work and Pensions Secretary Iain Duncan Smith, whose radical overhaul of the welfare state started this week, said last night: “From the outset I stressed my commitment to create a welfare system that is fit for the 21st century – one that has incentives for people to get into work and increase their hours, that is fair to the people who use it and fair for the taxpayer who pays for it.
“We are ensuring there is support for the most vulnerable in our society and our reforms mean we will be giving more help – financial and practical – to those people who need it.”
But he said he was sickened at the widespread extent of benefit fraud and the number of cheats who manage to wriggle out of paying back what they owe. Earlier this week Mr Duncan Smith unveiled the first measures to fix Britain’s broken welfare system, which will culminate with the introduction of the universal credit at the end of the month.
A cap on benefits of £26,000 a year, roughly equivalent to the average annual wage, is central to his ideology of “making work pay”.
It is hoped it will prevent a new breed of lifelong layabouts like shameless father-of-17 Mick Philpott, who lived off benefits worth £60,000 a year before being jailed for life this week for killing six of his children in a house fire.
Chancellor George Osborne won backing from David Cameron after using the Philpott case to highlight the need for welfare reform.
Official figures show £1.2billion is lost to benefit fraud each year, including £350million in bogus housing benefit payments, £180million in income support and £150million in jobseekers allowance.
The latest crackdown is aimed at fraudsters like Lester and Pauline Hawkes. They were claiming a raft of benefits while running a website selling counterfeit DVDs, CDs and MP3s which made them £460,000 over five years.
After pleading poverty, the couple were housed in a four-bedroom detached house in Scarisbrick, Lancashire, paid for by housing benefit, council tax and income support payments which totalled £74,000 a year.
They are awaiting sentence after admitting benefit fraud.
The crackdown will also target benefit cheats like Alan Lawson, who claimed he could barely walk, only to be found working as a fitness instructor at a council leisure centre. Lawson, 58, pocketed more than £80,000 over eight years after suffering a back injury that meant he had to walk with a stick.
But when his pain started to ease and he was able to work, he failed to tell the authorities.
Lawson, of Bishop Auckland, Co Durham, was jailed for eight months at Durham Crown Court in January for failing to notify the Department for Work and Pensions of a change in circumstances and making a false statement to get handouts.
Last night Daily Express columnist and former Tory MP Ann Widdecombe said: “If they did things my way, people working and claiming would have a choice. Come forward and tell us what you are doing and we won’t prosecute you. But if you don’t and you are found out, you will feel the full force of the law. I think that’s a far tougher stance.
“Huge numbers of people are playing the system, but we have known that for years. I believe the broken welfare system can be fixed, though.”
Frustrated ministers say it is relatively straightforward to recoup money from low-level fraudsters, simply by reducing their entitlements.
Those with assets can have them seized and sold, while savings accounts can be accessed. But if an individual has no assets they have to come to a voluntary arrangement to pay back what is owed.
Until now the Government has been hamstrung because millions simply refuse to co-operate, failing to respond to calls or letters or even a court summons.
According to one DWP insider the new orders – called direct earnings attachments – will be “hugely persuasive” in recovering all money owed.
Lord Freud, minister for welfare reform, said: “This move will make it easier to get back the money we’ve lost to fraud direct from the benefit cheat’s pay packet.”