The National Audit Office (NAO) has produced a damning report on the DWP’s failure to put right errors for years after they had come to light. The report reveals that some ESA claimants will be paid £20,000 in missed payments, but that about a third of all the money owed will never be repaid.
According to the NAO, the DWP failed to award income-related ESA to around 70,000 claimants who were transferred from incapacity benefit to contribution-based ESA from 2011 onwards.
The DWP’s estimate is that 45,000 claimants are owed around £2,500 in enhanced disability premiums, another 20,000 are owed £11,500 because they were entitled to the severe disability premium and a small number may be owed up to £20,000 each.
However, the DWP is managing to hang on to a third of the money it has underpaid sick and disabled claimants.
This is because it is only legally obliged to repay underpayments from 21 October 2014, when the upper tribunal first ruled that contribution-based and income-based ESA are a single benefit and that the DWP has a duty to assess claimants for eligibility to both types of ESA when a claim is made.
This means that underpayments from before this date all the way back to 2011 can simply be ignored by the DWP.
In total the DWP is expected to pay out £340 million but will be able to retain a further £150 million that it took from the pockets of claimants.
The reality is that the law clearly stated that the DWP had to check eligibility for both types of ESA even before the upper tribunal made its ruling, it’s just that the DWP chose not to follow it.
Even after the tribunal ruling in 2014, the DWP failed to take any action to reimburse claimants who had missed out. It was not until July 2017 that the DWP finally admitted that it had a duty to identify claimants who had been underpaid and reimburse them.
Amyas Morse, head of the NAO, said:
“The facts of this case are that tens of thousands of people, most of whom have severely limiting disabilities and illnesses, have been underpaid by thousands of pounds each, while the department for several years failed to get a proper grip on the problem.
“The department has now committed to fixing this error by April 2019, but not everyone will be repaid all the money they have missed out on.”
Frank Field, chair of the work and pensions committee, said:
“This is a damning report. The department is quick to act in cases of overpayment, quick to sanction claimants for any breach of its rules – but when the shoe is on the other foot, has shown it will take years to recognise and get to grips with its own mistakes.”