The Public Accounts Committee said the Department for Work and Pensions took six years to act on underpayments to claimants of ESA, which is given to people who are unable to work because of illness or disability.
A PAC report published today stated that an estimated 70,000 people had been underpaid, with total underpayments amounting to up to £1.7bn each year.
The report said that the DWP has set a target that it should underpay benefit claimants by no more than 0.9% of total spending on benefits. It failed to meet this and it is estimated that it underpaid claimants by 1% of expenditure, worth £1.7bn.
PAC chair, Meg Hillier, said: “Thousands of people have not received money essential for living costs because of government’s blinkered and wholly inept handling of ESA.
“Its sluggishness in correcting underpayments, years after it accepted responsibility for the error, points to weaknesses at the highest levels of management.”
The department only began identifying and repaying people affected by mid-2017 – six years after the government decided to move two million incapacity benefit recipients onto ESA, which was introduced in 2011.
The DWP first acknowledged errors in ESA payments in 2014, but front-line staff knew about the issue as early as 2013, prompting the PAC to describe this as evidence of a “culture of indifference”.
The committee estimated that those affected lost out on average £5,000 each – and some are owed as much as £20,000.
Its report said that the DWP has not yet assessed exactly how much money in total claimants have missed out on, but it expects to pay about £340m in arrears by April 2019.
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 £40m so far.”
