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Welfare fraudsters hit harder than tax evaders - research

#1 User is offline   hukildaspida 

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Posted 21 June 2016 - 04:56 PM

Welfare fraudsters hit harder than tax evaders - research

Author
Michael Sergel, Gia Garrick,
Section
National,
Publish Date
Tuesday, 21 June 2016, 5:25AM

http://www.newstalkz...aders-research/


New research suggests welfare fraudsters are facing a tougher time than tax evaders, despite tax evasion costing taxpayers three times more.

A study by Victoria University shows tax discrepancies cost the Government $1.24 billion in 2014, while welfare fraud cost the Government $30.6 million.

However, tax evaders are far less likely to be investigated, prosecuted or imprisoned, and far more likely to have debts written off.

Associate Professor Lisa Marriott said judges tend to denounce blue collar criminals for the "seriousness" of their offending and recognise the "good character" of white collar offenders.

"You tend to see a lot more excuses made for white collar crime. You tend to see language which is a lot harsher associated with welfare fraud."

In one case, a judge told a person found guilty of tax fraud relating to $250,000 they had given "selfless service to the law" and recognised that they "[did not] have a malicious bone in [their] body".

In another case, a judge told a person found guilty of welfare fraud relating to $30,501 they had "ripped the system off" and defrauded the whole country.

The study found the cost of debt recovery was $2.86 for every $100 of tax recovered, and $17 for every $100 of welfare payments recovered.

It also found between 800 and 1000 people were prosecuted for welfare fraud every year, while only 60 to 80 people were prosecuted for some form of tax fraud.

Ms Marriott said even tax fraud and welfare fraud cases involving the same amount of money were treated differently under the law.

"People these days generally tend to think tax evasion is a more serious crime because the financial significance to society as a whole is much greater with tax evasion.

"You've got tax evasion of about three times as much, with the likelihood of getting a prison sentence which is about three times less."

Tax evasion: the numbers


- The Government lost about $1,240,000,000 in tax discrepancies in 2014
- About 0.01% of taxpayers are investigated each year
- About 60-80 people are prosecuted for tax evasion each year
- It costs about $2.86 to recover $100 of evaded tax
- Approximately $430 million of tax was written off in 2011/12
- There were 399 cases of tax evasion between 2008/09 to 2013/14
- The average case during this period involved $229,471
- About 18% of cases during this period resulted in imprisonment

Welfare fraud: the numbers


- The Government lost about $30,553,600 in welfare fraud in 2014
- About 5% of beneficiaries are investigated each year
- About 800-1000 people are prosecuted for welfare fraud each year
- It costs about $17 to recover every $100 of fraudulently obtained welfare payments
- Approximately $10 million of welfare payments was written off in 2011/12
- There were 45 cases of tax evasion between 2008/09 to 2013/14
- The average case during this period involved $76,550
- About 67% of cases during this period resulted in imprisonment

Source: Lisa Marriott, Victoria University School of Accounting and Commercial Law
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#2 User is offline   hukildaspida 

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Posted 21 June 2016 - 04:58 PM

Welfare fraud targeted more than tax evasion

1:57 pm today

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People who commit welfare fraud are 10 times more likely to be prosecuted than tax evaders, who do 33 times more damage to the economy.

Research by Victoria University shows tax evasion amounts to at least $1 billion a year compared with $30 million for welfare fraud, but the courts are much harsher in their treatment of welfare fraudsters.

Associate professor Lisa Marriott has been researching the topic for several years and said nothing had changed.

In most years 800 to 1000 people were prosecuted for welfare fraud, but only 60 to 80 people for tax evasion, she said.

"So, for tax evasion we're really seeing only the most serious of offences being criminally prosecuted, whereas for welfare fraud we see prosecutions being taken at a much lower level."

Ms Marriott said figures for tax evasion over six years showed average offending of $229,000. The tax evaders who were criminally prosecuted had an 18 percent chance of receiving a prison sentence.

"If you contrast that with welfare fraud over that same time period, for average offending of $76,000 - quite a bit less - the welfare fraudsters had on average a 67 percent chance of receiving a prison sentence. So for about a third of the offending, there's almost three times as much chance of receiving a prison sentence."

Court records showed in most serious financial cases only 5 percent of the amount was repaid but for cases like welfare fraud, the offenders were much more likely to repay all the money.

Ms Marriott said despite the higher cost of tax evasion, people who committed welfare fraud were judged more harshly because society had little sympathy for people on welfare.
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#3 User is offline   hukildaspida 

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Posted 21 June 2016 - 05:07 PM

http://www.victoria....raud-sentencing

Courts more lenient on white collar criminals

New Zealanders take welfare fraud more seriously than tax evasion despite the latter depriving the country of much greater sums of money according to research.

Dr Lisa Marriott, a Senior Lecturer in the School of Accounting and Commercial Law, is investigating the differences in prosecution outcomes for the two offences, both of which, she says, involve money, are premeditated and have the same victims—the Government and society.

“One is not giving what you should and the other is taking what you shouldn’t.”

Her analysis of court data on the most serious offending from 2008–2011 shows that 22 percent of people found guilty of tax offences received a custodial sentence while 60 percent of benefit fraudsters were imprisoned.

Dr Marriott’s investigation also shows tax crimes are more costly, with those given custodial sentences committing offences valued at just over $800,000. Benefit fraud averaged $67,000 per offender.

Benefit fraud cost New Zealand $22 million in 2010, or around $5 for each New Zealander. While it is difficult to get accurate figures for tax evasion, the Tax Justice Network estimates New Zealand missed out on more than $7.4 billion of tax revenue in 2011, or around $1,500 per New Zealander.

“So the figures for tax evasion are phenomenal while they are relatively small for benefit fraud,” says Dr Marriott, “but we have quite different attitudes to the two crimes. It’s not uncommon for New Zealanders to pay cash to tradespeople, for example, even though that is a form of tax evasion.”

She says the relatively lenient punishments awarded to tax evaders are unlikely to act as a deterrent to others.

A key interest for Dr Marriott is the ideology driving tax punishment.

“It could be that we think people who commit tax offences are more like us so we judge them less harshly. At the same time, we demonise people on welfare even in the words used to describe them, such as ‘dole bludger’.”

Dr Marriott is now comparing differences in how New Zealand and Australia treat blue and white collar criminals.
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#4 User is offline   hukildaspida 

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Posted 21 June 2016 - 05:09 PM

Courts tougher on benefit fraud than tax dodging – study

Sunday 21 Oct 2012
6:05 p.m.

Read more: http://www.newshub.c...8#ixzz4CBgyjNpD


http://www.newshub.c...8#axzz4CBgnpz6c



By Susie Nordqvist

New research reveals tax dodgers are ripping off the country at up to 150 times the rate of welfare fraudsters, but are being jailed much less often.

So why are our courts showing more tolerance to tax evaders? One is not giving what you should; the other is taking what you shouldn't.

“Tax evasion, that's the deliberate act of not giving money to the Government that you should give to them,” says Dr Lisa Marriott at Victoria University. “And benefit fraud is the act of deliberately taking money from the Government you're not entitled to.”

Last year, tax evaders cheated the country of between $1 and $6 billion, while welfare fraud cost $39 million.

“The problem of tax evasion is at best case scenario 25 to 50 times the financial amount of welfare fraud, and at worst case scenario potentially 100 to 150 times the amount,” says Dr Marriott.

And the latest research from Victoria University suggests our courts are far from equal in their treatment of the two groups.

“For tax evaders, the average offending is about four times as much, but have about a third of the likelihood of receiving a custodial sentence.”

The numbers tell the story. For tax evaders, the average offending is $270,000, and those found guilty have only a 22 percent, or one-in-five chance, of being jailed.

For welfare fraudsters, the average offending is $70,000, and those found guilty have a 60 percent chance of being jailed.

So is it a case of our courts demonising the poor?

“It highlights the prejudices we have against beneficiaries and that we're judging them as different because of their work status,” says Sarah Thompson of Auckland Action Against Poverty.

A tax expert says the penalties are there.

“You can get fined significant amounts,” says Geof Nightingale of PricewaterhouseCoopers. “You can go to jail. You can have home detention or community service.”

It's how they're being applied that's the issue.

“I am a little surprised by that finding and somewhat concerned if there's any suggestion that tax evaders are treated more lightly than benefit fraudsters,” says Revenue Minister Peter Dunne. “I don't think that's fair.”

Mr Dunne says the Government has allocated almost $200 million to chasing tax evaders in the past couple of Budgets, with returns of more than $6 for every $1 they invest.

But some say people will continue to conceal their earnings until the courts start punishing tax evaders with the same severity they display with benefit fraudsters.

3 News

Read more: http://www.newshub.c...8#ixzz4CBh4l327
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#5 User is offline   hukildaspida 

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Posted 21 June 2016 - 05:12 PM

From 2012

Courts softer on criminals wearing suits
KIRSTY JOHNSTON
Last updated 05:00 18/11/2012

http://www.stuff.co....s-wearing-suits

https://static2.stuf...116/7965116.jpg

White-collar criminals evading the taxman are far less likely to go to jail than blue-collar fraudsters, new research shows.

The unequal treatment of rich and poor will now be further investigated by a Marsden Fund grant recipient, who says tax cheats are costing the country billions more than welfare cons but rarely see the inside of a cell.

"They have the same victim - the government and society - yet one is punished much more harshly than the other," said tax lecturer Dr Lisa Marriott of Victoria University. "The study does indicate there is a fairly serious problem there."

In her pilot study examining three years of tax evasion compared to welfare fraud in New Zealand, Marriott found that welfare fraud was significantly more likely to be prosecuted than tax crime.

This was despite huge differences in scale.

In 2010 alone, tax evaders cheated the country of between $1 billion and $6b, while welfare fraud cost $39 million.

The average offending for welfare fraudsters was $70,000, and those found guilty had a 60 per cent chance of being jailed.

For tax evaders the average was $270,000, but those found guilty had only a 22 per cent chance of being jailed.

The cases were barely comparable. For example, a welfare fraudster who stole $148,000 - at the upper end of the scale - received 18 months in prison. Meanwhile, a tax cheat who failed to pay $222,000 in tax - at the lower end of the prosecution scale - got eight months' home detention and 250 hours' community service.

Marriott said the reasons for the differences in sentencing were not obvious.

"The sentences are intended to reflect society's views. And it seems we take a dimmer view of people on welfare - even the language is more punitive," she said.

Marriott found that attitudes towards tax evasion were indulgent, even occasionally admiring, while beneficiaries were considered "scroungers or cheats".

Auckland Action Against Poverty spokeswoman Sarah Thompson
said that perception needed to change. "We have a cult of prejudice against beneficiaries. This research shows not only is that belief unfounded, but it's wrong. Tax evaders are ripping off the country to a much greater extent than beneficiaries are."

Auckland law professor Bill Hodge
said the legal discrepancies could have evolved because of the complexities in tax law compared to the "black and white" welfare law.

"There's greater clarity [with welfare fraud] because of the amount of paperwork beneficiaries are required to fill out," Hodge said.

"Whereas the spectrum of tax minimisation to evasion, which is unlawful, has a lot of grey areas."

Marriott will further investigate sentences for fraudsters and the reasons behind them to complete her study, called The Colour of Crime: Investigation of attitudes towards blue and white-collar offending. She received $345,000 from the Marsden Fund to carry out the work.


SENTENCING EXAMPLE:


Blue collar – serious examples of welfare fraud:

Offending of $106,000: 20 months' prison

Offending of $121,000: Eight months' prison

Offending of $128,000: 18 months' prison

Offending of $148,000: 18 months' prison

White collar – examples of tax evasion

Offending of $222,000: Eight months' home detention and 250 hours' community service

Offending of $230,000: Six months' community detention

Offending of $500,000: 12 months' home detention

Offending $683,000: 30 months' prison
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#6 User is offline   hukildaspida 

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Posted 21 June 2016 - 05:16 PM

Just who is paying for this research and what benefits are there to be gained from it when it is already common knowledge ?

Marsden Fund grant recipient tax lecturer Dr Lisa Marriott of Victoria University received $345,000 from the Marsden Fund to carry out the work, is this in conjunction with her usual job as a tax lecturer at Victoria University?

Or is it on top of her payments for that role?

Meanwhile some University students suffer hardship and hunger and say to day struggles to pay their accommodation.

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Posted 07 October 2016 - 02:53 PM

Cabinet Paper Information

Lisa Marriott made this Official Information request to Ministry of Social Development

https://www.fyi.org....per-information

Attachment Mariott Dr Lisa Final Response dated 2 October 2014.pdf
5.9M Download View as HTML

https://www.fyi.org....ober%202014.pdf
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