The DWP has finally surrendered and agreed to repay ESA claimants all the money that was unlawfully withheld from them, it was announced yesterday. The u-turn follows the publication of a highly critical report by the Public Accounts Committee (PAC).

In March of this year we reported that 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.

Affected claimants are owed between £2,500 and £20,000 each.

However, the DWP had insisted that they were 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 meant that underpayments from before this date all the way back to 2011 were simply being ignored by the DWP.

The PAC report, published yesterday, accused the DWP of multiple failures:

“It failed to design a process that reflected its own legislation. It failed to subject that process to proper scrutiny. It failed to listen to its own staff, claimants, or external stakeholders and experts who told it things were going wrong and that it needed to slow down. And it failed to act even when it was painfully obvious that it was underpaying a significant number of people, taking over six years to take the necessary corrective action.”

Committee Chair, Meg Hillier MP, commented:

“Indifference has no place in the delivery of vital public services. It must be rooted out wherever it is found.

“The Department needs to explain what it is doing to improve both its management culture and its ability to gather and act promptly on critical intelligence.

“It must also set out how it will more quickly address the £1.7 billion of underpayments claimants miss out on each year.

“Half-hearted Whitehall targets offer no comfort to people struggling to make ends meet because of Government mistakes."

Within hours of the report being published, Esther McVey, secretary of state for work and pensions, made a statement saying that the DWP would be backdating ESA payments all the way to 2011. Claimants who have already received their backdating will have their case reviewed again to see if they are entitled to any more money.

Child Poverty Action Group, which had launched a legal challenge to the DWP’s original decision to limit backdating, welcomed the u-turn.

However, the DWP is still refusing to pay compensation for consequential losses, such as loss of free prescriptions, free dental care and free school meals.


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