20 January 2006
Opposition MPs have called for an 'urgent and independent' investigation into the alleged failure of the tax credits system to deal adequately with fraud.
Liberal Democrat work and pensions spokesman David Laws has demanded a review of the 'accident-prone' system following revelations that the identities of up to 4,000 Network Rail staff were stolen in an attempt to make fraudulent claims using the government's on-line portal.
The problem involving NR staff emerged during a Revenue & Customs investigation into a massive and co-ordinated attempt to defraud the tax credits system (which makes £16bn in payments to more than 6 million people annually) last year.
In December it was revealed that the identities of up to 13,000 staff at the Department for Work and Pensions – including vital National Insurance numbers – had been stolen by criminals who had obtained access to the DWP's payroll.
On January 18, paymaster general Dawn Primarolo revealed that 6,800 DWP staff had fraudulent claims totalling £2.7m made against their names.
Public Finance discovered the extent of the NR-related attempted fraud this week. A guidance note distributed to
tax credits offices states: 'It has been identified that the personal details of a number of Network Rail employees may have been used in attempts to fraudulently claim tax credit using the Internet.'
A spokesman for R&C said: 'This fraud involved a number of suspects opening up bank accounts in the names of Network Rail employees.
'When they tried to defraud the tax credits system, it was R&C that detected the fraud, informed Network Rail, closed it down and stopped the payments.'
PFjan2006
