Government faces £1.67bn bill for benefits arrears

19 Oct 18

Benefits claimants will receive a £1.67bn windfall, owing to “historic underpayments” by the government.

An average of £5,000 is owed to around 180,000 people who previously claimed Employment Support Allowance, the Department for Work & Pensions has revealed.

Estimates suggested the government could end up paying back £1.67bn of benefit payments in arrears, as outlined in a DWP document published on Wednesday.

Frank Field, chair of the work and pensions select committee, said: “It is welcome that the government is finally making progress towards repaying people who missed out on ESA disability benefits.

“The government must learn the lessons from this appalling failure, as it faces the much bigger challenge of moving people onto universal credit.”

The government document said the “historic underpayments of ESA… arose while reassessing incapacity benefit claims” in 2011.

DWP’s document said: “We estimate that around 180,000 people could be owed arrears payments, with around 105,000 estimated to be repaid during 2018-19 and 75,000 during 2019-20.”

The DWP’s underpayments stood at £970m and it must now pay an extra £700m until 2024-25 for ongoing ESA awards.

As of 15 October, the total amount of historical arrears paid was £120m to 18,000 qualifying claimants.

A DWP spokesperson said: “Anyone affected by this historic error will receive all of the money they are entitled to.

“That is why we have created a dedicated team of over 400 staff to examine cases, and have paid back around £120m so far.

“We have worked with charities and other disability organisations to make sure that we are providing the right support to all affected claimants and are hiring and allocating more staff to do that.”

Shadow work and pensions secretary Margaret Greenwood recently suggested that Labour could be open to scrapping universal credit.

In September, PF reported official government figures showing that benefit overpayments reached £3.8bn in 2017-18.

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