A single mother diverted Universal Credit payments intended for welfare claimants into her own bank account to settle her cocaine debt.
Hayley Powell, 43, worked as an administrative case manager throughout the 14-month scam for the Ashton-Makerfield office in Wigan.
She pinched shortfalls in benefits credits and forwarded them onto herself.
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Investigators who unravelled the scam found Powell had used her DWP log-in details and password to carry out 33 fraudulent online transactions.
She also diverted payments into the bank account of a close friend, Jonathan Duffy, 46, a struggling single father - even demanding a "cut" of his proceeds.
On each occasion, Powell would fake forms giving reasons to explain why the money was not going into the accounts of genuine claimants.
She also exaggerated her own dire financial straits to pocket extra child care allowances.
The amount she stole in all totalled £25,188.52.
Powell later admitted she needed the money as she still had debts from a cocaine habit which she managed to kick in 2018.
She claimed her dealers had been vandalising her home, made threats and demanded money.
Powell spared jail as her child 'would've had to move to live with her dad'
At Bolton Crown Court, Powell faced up to three years of jail time after she admitted fraud by abuse of position.
But she sobbed uncontrollably in the dock as she was sentenced to 16 months jail suspended for 18 months and ordered to complete 150 hours of unpaid work.
She is currently living on state handouts.
Sentencing, the judge Miss Recorder Alexandra Simmonds told Powell, of Holly Road, Golborne, she had only escaped jail because her daughter with whom she lives would have been forced to move house and school to stay with her father.
But she added: ''In short over a 14 month period you received Universal Credit to which you were not entitled to and abused your position of trust as an employee of the DWP to divert money intended for genuine claimants and you made up reasons for the change in the system to cover your tracks.
''There must have been some planning involved to identify potential universal credit accounts to steal from and then make up justifications for changes in payments for them on the system.
''There will inevitably have been some distress and potential hardship to the true recipients of these payments.
"Their funds would have been delayed because you syphoned them off before they got there.
''You also got your friend involved in criminality which he wouldn't otherwise have got involved in. You even demanded a cut from the fraudulent payments made to him.
''But you are the main carer for your six-year-old daughter - she lives with you and I have considerable regards as to the likely significant impact on her.
"If you went to prison, she would be required to leave her family home and reside with her father and change schools. The upheaval it would cause to her, means I can suspend the sentence.
''You could have no complaints whatsoever if I was to send you through the back door with the prison officers - but you have come as close as it gets to going to custody.''
Scam took place for over a year
The court heard the scam took place between October 2018 and December 2019 whilst Powell was working for the DWP in Ashton-in-Makerfield.
Roger Brown prosecuting said: ''Because of her employment, it enabled her to divert money into their own bank account which had been intended for genuine claimants of Universal Credit payments.
''She also made 14 Universal Credit payments to Duffy's bank account and dishonestly adding child costs to his claim for benefit.
''He had wanted to claim benefit as a result of child care costs he had incurred and he knew Powell for many years and were friends. She said she would do something about it and, as a consequence, money was paid in his account.
''The total amount he got was £8,308 although a portion of that money was then paid by him into Powell's account.
''The investigation revealed Powell's unique staff number, her pass card and password on the computer had been used at the times when changes were made as regards the destination of payments.
''In each case, the genuine claimant had not received everything they were entitled to and were expecting a shortfall to be paid to them - it never arrived.
''In one transaction she diverted payment from a claimant's account into her own account with the form falsely saying the claimant had asked for it to be paid into her sister's account
''Another false reason given was that payment should be made into the claimant's wife's bank account as the claimant had lost his bank card and was unable to access his own bank account.
''When interviewed Powell made admissions saying she owed money for drugs and owed debts to relatives. When asked about the amount of money involved she said she had bought more drugs when she paid her debt off.''
Duffy, a forklift truck driver, later told investigators he had known Powell for 26 years and knew she worked for the DWP.
He had initially made genuine claims for benefit but turned to Powell for help when his request was refused for more child care payments due to his work hours being increased.
In mitigation for Powell, defence counsel Neil Ronan said: ''The reason for this behaviour was to pay off debts for things she was putting up her nose and for which she had already sought help for.
''It the paying off of the debts for her historic abuse of drugs that led to her abusing the trust placed in her. It was inevitable she was going to be caught.
''She had debt collectors breathing down her neck and somebody put her window through, threatening her and wanting money. She wanted to deal with that issue and very real physical threat and made a very stupid choice.''
He added: ''She had been in an abusive relationship for some time, leaned on that addiction and was found a place in a refuge. She is now completely free of the addiction which led to the depths she found herself in.
''It's ironic she's now relying on the very credit she abused but she wants to focus on her daughter with whom she lives. Custody would have a deleterious effect on her child who has had a rough time and a good deal of upheaval.''
Duffy, of Ashton-in-Makerfield, admitted retaining an unlawful credit and was ordered to complete an 18-month community order and 100 hours of unpaid work.
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