Tuesday, August 14, 2018

Thousands owed £340m in underpaid benefits after ‘major’ DWP error

MPs have criticised a “culture of indifference” at the Department for Work and Pensions (DWP), after a “major” error resulted in thousands of people being underpaid in benefits for several years.

The Public Accounts Committee (PAC) estimates that 70,000 Employment and Support Allowance (ESA) claimants have been underpaid a shocking £340 million in ESA, with those affected owed an average £5,000 each and some owed as much as £20,000.

However, some people look set to miss out entirely, because the DWP has only agreed to backdate payments to 2014, even though the errors in payments go back much further.

In a damning report published today, the PAC blast the Department for taking longer than 6 years to rectify the problems that were causing the underpayments, “even when it was painfully obvious that it was underpaying a significant number of people”.

“It failed to design a process that reflected its own legislation”, the PAC said. “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.”

The DWP are now finally beginning to repay the arrears, but there is no plan to compensate sick and disabled ESA claimants who have missed out on passported benefits like free prescriptions and free school meals.

Committee Chair, Meg Hillier MP, said: “Thousands of people have not received money essential for living costs because of Government’s blinkered and wholly inept handling of ESA.

“The Department simply didn’t listen to what claimants, experts, support organisations and its own staff were saying.

“Its sluggishness in correcting underpayments, years after it accepted responsibility for the error, points to weaknesses at the highest levels of management.

“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.”

A DWP spokesperson said: “We take the issue of underpayments very seriously and have actively taken steps to put this right as quickly as possible, to ensure people get the support they are entitled to.

“We have recruited 400 extra staff and have already started making payments – over £40 million so far.

“We have continued to provide regular updates to both the PAC and the House in regards to the progress of these repayments, and will continue in this stead.”

UPDATE

The Secretary of State for Work and Pensions, Esther McVey MP, has today (18 July 2018) agreed to backdate underpayments of ESA to the date claimants were moved to ESA from Incapacity Benefit.

Commenting on the Government’s u-turn, Mr Field said: “This is a most welcome change of heart by the Department, which has now accepted that its obligation to repay is much wider than it originally tried to claim.

“The numbers who may be eligible for back pay will increase—from 70,000 to up to a quarter of a million.

“The Committee will press DWP further to find out what it plans to do for the people who missed out on other benefits as a result of the wrongful denial of ESA, for which they should also now be compensated.

“The parallels with Universal Credit are clear and troubling. The Department failed to listen to claimants, charities and even its own staff when they sounded the alarm. Their warnings fell on deaf ears, and tens of thousands of people lost out as a result.

“The Government must now learn the lessons from this catastrophic failure as it faces the challenges of migration onto Universal Credit.”

 

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