More than £2billion is being claimed in benefits by foreigners every year, including thousands of illegal immigrants, figures reveal.

The Department for Work and Pensions announced a fraud investigation last night after it emerged 5,000 illegals claimed handouts worth £42million to which they are not entitled.

Ministers acted after the first-ever study of claimants’ nationality, which found 371,000 foreign nationals are on out-of-work benefits.

The study by the DWP found 6 per cent of all benefit claimants were foreign nationals when the data was collected in February last year.

Of those claiming benefits, 258,000 were from outside the European Economic Area, which includes the 27 EU countries as well as Norway, Iceland, Switzerland and Liechtenstein.

But a follow-up exercise found 2 per cent of all claims by foreign nationals were made by those without the immigration status to justify the payments.

The DWP said last night: ‘Two per cent of cases appeared to have no lawful immigration status and the legitimacy of their status for benefit purposes is being investigated.

‘The DWP is co-ordinating with UK Border Agency to review the small number of cases where it appears benefit is being claimed illegitimately.

‘Where this is the case, benefit will be stopped and enforcement activity considered.’

Employment Minister Chris Grayling said: ‘It is not acceptable that people from other countries can claim our benefits if they have not worked or paid tax in the UK.

‘We will root out those claimants who cannot prove their immigration status and in turn they will be stripped of their benefits.’

Immigration Minister Damian Green said: ‘These findings uncover a worrying issue we have inherited, which is why we’ve ordered urgent work to pursue claimants suspected of abuse and to withdraw their benefits if they cannot prove they are entitled to claim.’

According to the figures, 54 per cent of non-EEA claimants went on to secure British citizenship. But the survey also suggests many are moving to the UK to take advantage of our generous benefits system.

Last year £35billion was paid to 5.5million people in out-of-work benefits, including Jobseeker’s Allowance, Incapacity Benefit and its replacement Employment and Support Allowance, Income Support, Disability Living Allowance, Carer’s Allowance and Bereavement benefit. Of that, 6 per cent, or £2.1billion, goes to foreigners.

Under current rules, those given leave to enter or remain in the UK may be eligible for income-related benefits, including anyone granted refugee status, exceptional leave to enter or remain, or Humanitarian Protection.

EEA nationals with ‘worker status’ who have left their job but are looking for alternative work are eligible for income-related benefits.

Those who can demonstrate they are seeking work are eligible for Jobseeker’s Allowance.

Robert Oxley, of the TaxPayers’ Alliance said: ‘With billions at stake the proper controls need to be in place to prevent benefit tourism from swallowing up taxpayers’ money.

Taxpayers will rightly worry the rules designed to prevent benefit tourists are steadily being eroded by a meddlesome EU, leaving Britain to pick up a bigger welfare bill than it needs to.’

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