The DWP has refused to follow a recommendation by the Parliamentary and Health Service Ombudsman (PHSO) to contact over 100,000 ESA claimants who are owed compensation totalling many millions for DWP errors.  However, one claimant has been awarded £7,500 in compensation and we explain below how you can begin a claim if you were affected.

The issue relates to mistakes made by the DWP which began over a decade ago.

In 2011 the DWP began transferring claimants from incapacity benefit to employment and support allowance (ESA).  However, in many thousands of cases the DWP only assessed claimants for contribution based ESA and failed to check whether they should also have been awarded income-based ESA.

Eventually, after many complaints and awards to claimants who had missed out, the DWP reluctantly launched a LEAP exercise to identify claimants who had been victims of their error. 

This resulted in 118,000 claimants getting backdated awards of ESA, in many cases amounting to thousands of pounds.  Others also got awards outside of the LEAP scheme.

However, these claimants were not told that they might also be entitled to special payments because they had missed out on other benefits or undergone hardship as a result of the DWP’s maladministration.

Indeed, the DWP specifically told claimants that they could not complain to the Independent Case Examiner and did not tell them about the Parliamentary and Health Service Ombudsman (PHSO).

However, one claimant – known as Ms U – had advice from a welfare rights worker. As a result, she did complain the PHSO after the DWP refused to pay her compensation in addition to £19, 832 in backdated ESA.

The PHSO found that Ms U had suffered considerable hardship and her health had suffered as a result of the DWP’s failures.  She had also missed out on free prescriptions, warm home discount payments and other help such as paying for a washing machine.

The PHSO recommended that the DWP pay Ms U £7,500 as compensation and also pay interest on the back payment of ESA.

The DWP paid Ms U, but refused to follow another recommendation of the PHSO.

This was that they contact claimants both within the LEAP exercise and outside it who had been given ESA arrears due to their maladministration, look into their circumstances and award them any appropriate compensation.

Instead the DWP argued that:  “should a claimant feel that they should receive compensation due to their individual circumstances, they can contact the Department and set out their reasons. All requests received will be considered on a case by case basis.”

The DWP know very well that almost none of the affected claimants will ever discover that they might be entitled to compensation and thus they will never know to ask for it.

In a recently released letter dated 10 May 2022, the PHSO said that they were “extremely disappointed” with the DWP’s decision not to follow their recommendations.

Unfortunately the PHSO has no power to force the DWP to do so.

We know that only a small proportion of Benefits and Work readers will have been affected by this issue. 

But if you are one of them, we have a downloadable letter, complete with instructions, that you can use to begin the process of applying for compensation. 

It comes with no guarantees that it will work, but waiting for the DWP to act seems to guarantee that you will not get a penny of what you may be owed.

If you are not personally affected but know someone who may be, please send them a link to this article.

And if you regularly post in a forum or belong to a group that might include affected people, again please give them a link to this page.

Who is affected

Affected claimants are those who were transferred from incapacity benefit to ESA, a process that began as far back as 2011, and who later received a lump sum payment of arrears because the DWP had failed to award you income-based ESA as well as contribution-based ESA.

Many claimants who received such a lump sum will have missed out on passporting to other benefits, such as free prescriptions and warm home discount payments.

What you can do

If you think you were affected you can write to the office which administers, or used to administer, your claim for ESA to ask for compensation.

We have created a simple, downloadable letter which you can use as the basis for your own.

We have kept this letter as simple as possible, with instructions for you in italics.  If you know the dates of any award of back-dated ESA or the amounts that you may have missed out on then by all means add them.  But, at this point, the most important thing is to begin your claim. 

If you don’t receive a reply, do as the letter says and make a formal complaint as well as contacting your MP’s office and asking them to pursue the matter

Download the letter in rich text format 

Download the letter as a .pdf 

You can read the PHSO’s original findings on the case of Ms U here

You can read the correspondence between the PHSO and the DWP here


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  • Thank you for your comment. Comments are moderated before being published.
    Matthew · 1 years ago
    This is interesting and I had no idea this was even a thing. I got my back payment years ago but always struggled with prescriptions and treatments for dental stuff. Even had threats saying that I wasn't qualified for it but they would 'forgive it' anyway. And some asking for money. Made me feel like a burden asking for help which led to my Crohns disease causing serious damage to my bowels as it was left untreated for so long.
  • Thank you for your comment. Comments are moderated before being published.
    Rachel Offley · 1 years ago
    I have a sort of reverse issue .... I do have an open claim for IR ESA but because my Contributory ESA is the larger amount, I am allegedly (ESA called me when I filled in a missed payment form) not entitled to any of the cost of living payments that most of the population are getting!

    Seems I will get the £150 DLA, but that's it! Meaning that because "I was 'doing the right thing' and WORKING' before I became ill, I am not entitled to any help!
    • Thank you for your comment. Comments are moderated before being published.
      VikingMermaid · 1 years ago
      @John I'm in the same position (C-B ESA), too.  I'd struggled all my life with work (undiagnosed ADHD and dyspraxia, plus associated anxiety and depression), with a very chequered work history (35+ jobs, interspersed with numerous periods of unemployment and as a student five times on different college courses and university degrees that I only partially completed). 

      I would mind less if I'd been advised to transfer to I-R ESA at the appropriate time - but I knew nothing about this option until I chanced upon an old blog post about it, after my now adult daughter (I-R ESA; autism and related anxiety/depression) received more benefit than me!  So I tried to transfer across from C-B to I-R ESA, but was told because both were now legacy benefits, this was no longer an option for me.

      CAB has more recently run a benefits check on me, and said I'd be significantly better off, financially, if I claimed Universal Credit (UC).  But I really cannot put myself through another assessment (my ESA appt was booked for 9am, I was called in to see the assessor at 9.35am, but it didn't start until 9.55am because the previously requested recording equipment had not been provided.  The assessment was gruelling and lasted until 12.15pm - just awful.  I heard nothing for six months, until I asked CAB for their help.  Turned out the computer with all the assessor's answers on had turned off after two hours - and all the assessment details had been lost.  (I was subsequently awarded zero points, but granted ESA-Support Group because of their worries over my mental health.)

      I know I should look at the B&W guide to claiming UC, but I find it all so triggering still (six years on) that I still put off making a claim.

      What rankles with me most is repeatedly hearing on radio and TV that those on the lowest incomes will get ca £1,200 in various benefits to see them through the cost-of-living crisis.  I want to scream to all those watching or listening that those of us on contributions-based ESA *won't* be getting anywhere near that amount - just the basic £150.  I believe even those in receipt of working tax credits (WTC) are entitled to those additional payments that we are denied.  The whole system is in a right mess and totally lacking in fairness. It's a massive injustice.
    • Thank you for your comment. Comments are moderated before being published.
      LEE · 1 years ago
      @John That’s the same as me worked all my days and I’ve been on contribution based esa for past few years and did not get any help with cost living payments,joke
    • Thank you for your comment. Comments are moderated before being published.
      Jill · 1 years ago
      @Rachel Offley I (and my partner ) are in the same position ( CB ESA & PIP ). As were all were with the £20 "Covid" UB uplift. ( Appeals via the courts were not successful as "It was intended for those who lost their job due to Covid" - yet went to ALL ).

      I appreciate that, as we're Non-Means-Tested we COULD have millions in the bank but probably not !

      I help in an advice group elsewhere and have to hear how 19 yos living at home are frankly gob- smacked to have got the first £326 COLP, spending it on all sorts. Similarly, my MIL, with savings of £50k with get £150 and the extra £300 on her £300 Winter Fuel Allowance - NOT means-tested but doesn't seem to matter if you over a certain age. I can't see how a disabled person needs the heating on any less. 

      I don't begrudge them but something's very wrong. 

    • Thank you for your comment. Comments are moderated before being published.
      EC · 1 years ago
      @Rachel Offley If you are entitled to any income-related ESA in addition to contribution-based ESA, then you should receive the cost of living payment.
      It is worth seeking advice from your local Citizens Advice and MP on pursuing this.
    • Thank you for your comment. Comments are moderated before being published.
      Matthew · 1 years ago
      @John I get income related old style ESA & PIP and got cost of living award. First half of it anyways. When I was wrongly on contribution based ESA I had no other means of support available so I feel for you. Hope you get what you're owed.
  • Thank you for your comment. Comments are moderated before being published.
    Jason William Lee · 1 years ago
    I have been owed money for about 5 years!
    I may take this letter to the citizens advice....

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