Overview

"Risk Based Verification is a method of applying different levels of checks to benefit claims according to the risk associated with those claims…this determines the level of verification required…we, therefore, wish to extend Risk Based Verification on a voluntary basis to all local authorities from April 2012"
Risk Based Verification of Housing and Council Tax Benefit Claims Guidance – HB/CTB S11/2011(DWP)

The application of Risk Based Verification is an innovative approach to benefit claims assessment that revolutionises the way in which efficiencies are delivered, whilst at the same time enhancing fraud and error detection rates.

This is achieved by enabling local authorities to assess likelihood, measured as a risk score, that a new claim or change in circumstance contains potential fraud or error, the risk score assigned to each claim indicates the level of verification that needs to be applied to that case.

Following the issue of DWP guidance (HB/CTB S11/2011), low risk claims may be streamlined, with full verification reserved for medium risk and additional verification applied to high risk claims.

This process leads to improved customer service, a dramatic reduction in processing time; an increase in the identification of errors at the claim gateway and a reduction in resource requirements.

New Claims

The application of Risk Based Verification is an innovative approach to benefit claims assessment that revolutionises the way in which efficiencies are delivered, whilst at the same time enhancing fraud and error detection rates.

The new claims model utilises up to date data from a wide range of UK LA’s and is in use at more than 40 local authorities, all of whom are benefiting form both increased claim processing efficiency and higher fraud and error detection rates at the claim gateway. The risk model utilises circa 50 variables to predict the likelihood of Fraud and error at the gateway and is reviewed and updated in order to reflect both legislative and claimant behavioural change.

A full MIS suite is provided in order that Risk Based Verification solution performance monitoring is available.

The new claims module is a fully integrated solution and is currently available to any local authority utilising either the Capita or Northgate Housing Benefit applications and or the following e-Claim solutions: Northgate, Capita, Team Netsol (BECS), Victoria Forms, Web Labs, although we are more than happy to work with any alternative suppliers not listed above.

Change in Circumstances / FERIS

Similar to the New Claims risk model, the in claim change in circumstance risk model utilises up to date data from a wide range of UK LA’s. The model is being utilised in order to streamline the level of verification at the point of a notified change in circumstance.

In addition to the change in circumstance processing efficiency outlined above; with the introduction of FERIS, local authorities are utilising the risk model in order to identify and target claims more likely to contain fraud and error for additional scrutiny.

This process is therefore highlighting additional in claim fraud and error and as such is also contributing to DWP outlined FERIS thresholds/targets.

The risk model utilises circa 65 variables to predict the likelihood of Fraud and error at the point of change in circumstance and is reviewed and updated in order to reflect both legislative and claimant behavioural change.

The change in circumstance module is a fully integrated solution and is currently available to any local authority utilising either the Northgate Housing Benefit application; at the time of writing Capita are currently undertaking the required HB system development (available end October 2015) in order to provide the necessary integration with this solution. We are however more than happy to work with any alternative suppliers not listed above in order to provide this service.

Atlas

In the same manner as all other RBV modules, the ATLAS risk model accurately predicts the likelihood of error for notified changes of circumstances with the Atlas file.

The model identifies those claims with a notified ATLAS change that are more likely to contain some level of error and risk scores claims accordingly. LA’s can therefore automate lower risk claims but retain the option to carry out further scrutiny on those claims deemed to be higher risk.

The risk model utilises circa 70 variables to predict the likelihood of Fraud and error at the point of an ATLAS notified change in circumstance and is reviewed and updated in order to reflect both legislative and claimant behavioural change.

The ATLAS module is a fully integrated solution and is currently available to any local authority utilising the CAPITA Housing Benefit application. As such the solution integrates directly with the Capita Atlas Manager Module. We are however more than happy to work with any alternative suppliers not listed above in order to provide this service.

atlas-risk-based-verification.jpg

Case StudyBolton Council

The solution / approach

Risk based verification is an approach that uses a risk model to identify applications that are more liable to include either error or potential fraud.This model identifies the types of responses that demonstrate patterns that are more indicative of fraud or error. The model was built over a period of years in analysing all claims that included fraud or error.

For claims where there is a low risk of fraud and error, the verification can be very low effort. This allows more resource to be invested into identifying and resolving fraud and error in higher risk claims, or the resource saved can be taken as a saving

All new applications are assessed on a risk scale of 1 to 15 (1 being very high risk of fraud/ error and 15 being very low risk).

Success

For claims where there is a low risk of fraud or error, the claim can now be turned around far more quickly – average processing time for low risk claims is 5.4 days (prior to RBV we can’t identify low risk cases). The average processing time across all claims has reduced from 24.8 to 17 days. The model also works as part of the on-line process. This has had a knock on effect of incentivising housing providers to encourage tenants to apply on-line. 61.4% of all claims have been low risk. The net processing days saved based upon lower verification checks, has been 21271 days in 5 months.

The model has allowed the service to invest additional time in those applications more likely to have fraud and error. 17.4% of all claims have been high risk. The impact has been increased capture of errors (which could have been fraud, but have been subsequently kept out of the system); we have identified 13.4% more error since the RBV approach was implemented.