Social care fraud

19 November 2020

Social care fraud isn’t the type of crime that springs to mind when the word ‘fraud’ is mentioned, but it’s one of the fastest growing risks to the public purse.

Fraud in adult social care has gained more traction in recent years. However it’s still a relatively unexplored area. Knowledge within the public sector is on the increase and several high profile prosecutions have helped to raise awareness, but there is more work to be done.

According to CIPFA’s latest fraud and corruption tracker, social care fraud costs the public purse an estimated £13.7m a year – with the average case worth £29k. We see a high volume of fraud in this area and believe the figure may actually be higher, with many cases going undetected all over the country.

What is social care fraud?

When someone requires care, the local authority has a duty to them. There are a lot of rules involved with social care funding. They can depend on the type of care someone receives and their current circumstances.

Generally, anyone with savings or assets over a certain amount will be required to pay for at least some of their care. There are exceptions to this, but mostly the local authority will only fund care for those with less than £23,500 in capital.

As with many areas of public funding, the schemes can be open to abuse.

Financial abuse

This is the most common type that we see, making up about half of all our social care fraud cases. Financial abuse is where the person in care has their money stolen or misappropriated.

Sadly this is often committed by someone close to them, who might hold power of attorney and therefore have access to their finances. When their funds have been abused, usually by a family member, they’re no longer available to pay for their care.

This means the council has to step in and foot the bill. Losses can be as high as £100,000+ in a single case, making the council as much of a victim as the service user. In one case, a dementia sufferer had more than £160,000 stolen by her daughter and son-in-law.

As they held power of attorney, they were able to sell her house and pocket the money. Not telling the council about this, they spent the majority of the funds on themselves. This resulted in a huge loss to the authority who had to step in and pay for the care from public funds.

Following an investigation by North Yorkshire Police, working with Veritau and the council, the daughter and son-in-law both received prison sentences.

Direct payment fraud

Direct payments are council funds given to people in need of care. The scheme allows care users to manage their own money and provides independence for choosing what kind of care they would like. For instance, people use direct payments to employ their own personal assistants.

Family members can manage direct payments on behalf of the care user, which sometimes leaves the scheme open to abuse. Where funds are spent on things other than what’s included in a care plan, this may constitute fraud.

One case in Selby saw the son of an elderly man steal thousands of pounds of his direct payments. He spent them on gambling, hotel stays, and a Rolex watch. The council lost thousands of pounds and the father did not receive the care he needed.

Direct payment fraud can also be committed by carers, where they may falsify timesheets or expense claims to earn more wages from the payments that they should.

Additionally, cases could involve false or exaggerated care needs. If someone purports to have needs they do not, receives money to pay a carer, then keeps the money for themselves, this is social care fraud.

Undeclared capital

If someone has more than £23,250 of savings, they are not entitled to local authority funding for their care. Sometimes people are able to conceal their capital and hide additional money from assessors to obtain funding where they are not entitled.

In 2018, our team had a landmark case in which the council prosecuted its first social care fraud. Previous prosecutions had been achieved with involvement of the police and Crown Prosecution Service.

A social care user’s son deprived the public purse of over £86k when he lied on a financial assessment. Claiming that his parents still owned their house, he told the council that his father was living there. His mother was in residential care meaning that the property would be exempt if the spouse was still there.

However in reality, he had sold his parents’ property on their behalf for £200k – most of which went into his bank account.

This meant that the council funded his mothers’ care because the capital from the house sale had not been declared. As a result, £86k was paid out from public funds.

At court, he was given a 20 month custodial sentence, suspended for two years. The debt was paid back in full.

Deprivation of capital

This is not strictly fraud as it’s a civil mater, not a criminal matter. Deprivation of capital is where someone deliberately reduces their savings or gets rid of assets.

If they know they will need care, and ‘gift’ their money or assets to family and friends in order to avoid paying for it, this is violates the rules of the Care Act 2014.

Our team investigates these suspicions on behalf of local authorities to make sure they can recover the money if there’s evidence of deprivation.

Protecting individuals and finances

Social care fraud often involves vulnerable individuals, and when money is stolen from a care user this often leads to a financial loss to the local authority through loss of care fees.

We therefore have a duty to protect the finances of both the individual and the local authority. Our fraud investigators work closely alongside safeguarding teams to ensure care users aren’t at financial risk, and that care funds go to those who really need it.

Contact us

We work for over 500 public sector bodies in the north of England including nine local authorities. You can report fraud affecting your organisation on our anonymous hotline or by email.

If you have any suspicions of any nature, don’t hesitate to report them. The council will only take action where necessary.

0800 9179 247 | [email protected]

This week is International Fraud Awareness Week (IFAW). We’re raising awareness of some key fraud areas affecting local government and the public sector.

Find out more about our fraud services