Naturalisation. Good character. Fraud in relation to public funds
If you apply to naturalise as a British citizen, you must satisfy the good character requirement. One of the factors considered when assessing your character is your financial soundness.
If you are reliant on public funds, this situation alone should not be affecting your financial soundness.
But if you had a condition attached to your leave to enter or remain prohibiting your access to public funds, and, in breach of this obligation, you applied for and received state benefits, then you may be found as not being of good character, and also as being in breach of the immigration rules (which is in itself another requirement for naturalisation). In such a case, your application for citizenship will normally be refused.
If, when applying for public funds, you provided false, misleading, or incomplete information, you have committed fraud. If you have been convicted and sentenced for the fraud, you will not be considered as being of good character, and your application for citizenship will be refused. Your good character requirement will also be undermined by the presence of the criminality element. Being convicted for the offence of fraud in relation to public funds will lead to your application for citizenship being refused.
If you want to apply for British citizenship or for a British passport and need specialist advice, feel free to contact me. Please note that I am an accredited immigration adviser, not an employee of the UK Visas and Immigration. I charge fees for the advice provided.