One in 20 British expat pensioners are fiddling their state pensions by claiming inflation-linked rises to which they are not entitled, according to the government.
The British pensioners claim the annual pension increase and the £200 winter fuel allowance by telling the Department of Work and Pensions they live in the UK when they really live overseas.
By giving a friend or relative’s address in the UK as their home, expat pensioners can claim the same benefits as a pensioner who genuinely lives in Britain.
One expat pensioner who has lived for years in tropical Pattaya in Thailand was recently hauled before the courts after his scam was discovered when his mother died in Britain.
Crackdown on fraudsters
The expat, who only gives his name as Stan to avoid more official attention, says he is also facing criminal action for tax evasion.
“It looks like my income from UK will be cut by over a half for several years because of the accumulated fines,” he told a reporter in Thailand.
To combat the fraudsters, HM Revenue & Customs is checking how expats suspected of scamming the state pensions spend on credit and bank cards to detect regular overseas transactions.
Passports due for renewal are also scrutinised for long-term visa stamps. Expats must send a copy of each page of their passport to the authorities before a new one is issued.
How much is the state pension for expats?
The UK government does not publish official bogus pension claim figures, but officials suggest no more than 5% of British expats abroad are fiddling their benefits.
State pension payments depend on if expats are on the old or new system.
British pensioners across the EU and in a few other countries receive an index-linked new state pension worth £164.35 a week or £8,546.20 a year from April 6.
The old state pension will increase to £125.95 a week or £6,549.40 a year at the same time.
Only pensioners living in countries with a reciprocal benefits agreement with the UK receive the annual increase – the rest are frozen at the level of the first payment.
The DWP has a team of investigators tracking down benefit and state pension fraudsters in Spain, the most popular overseas destination for expats.