DWP to Pay at Least £970m to ESA Benefit Claimants After Admitting Underpayment Errors

November 1, 2018

The Department for Work and Pensions (DWP) is to pay out an average of around £5,000 to an estimated 180,000 people after it emerged that system errors had led to those people being underpaid benefits on a very considerable scale.

The issues relate to Employment and Support Allowance (ESA) and people who were switched on to those benefits in 2011.

ESA is the benefit given to disabled people across the UK and, while it had been thought initially that around 70,000 people may have been impacted by the administrative errors, the number could eventually prove to be closer to 300,000.

A newly revealed internal note on the subject sent within the DWP said: “The Department estimates it will pay £970 million in historic underpayments largely over the financial years 2018/19 and 2019/20.”

However, the extra cost of paying out money to people whose claims for ESA benefits now need to be corrected is expected to add around £700 million to the DWP’s expenditure over the next seven years.

Those extra costs, added to the amounts needed to settle the historic underpayments, will mean the DWP’s errors will cost it in excess of £1.5 billion, and potentially more.

Although the average payments to be made to the people affected by the issues will be £5,000, some ESA claimants will be paid considerably more and potentially in excess of £10,000.

“It is welcome news that the government is finally making progress towards repaying people who have missed out on ESA,” Frank Field MP, chair of the House of Commons work and pensions committee, is quoted as saying by the BBC.

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

The process of moving millions of benefit claimants from across the UK onto Universal Credit has been a controversial issue in recent weeks and months, with many people finding themselves left without any payments for extended periods while they wait for the new system affecting them to kick in.

Foodbank operators, including the Trussell Trust, have warned that they expect to see sharply increased demand for their services in areas of the country where the Universal Credit system has been rolled out.

Joanne Wright

Head Adviser at our Manchester Office

Tel: 0800 001 4247
Email: enquiries@ukdebt.org.uk

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