The Department of Social Security admitted yesterday that people had died in poverty when they were owed "large amounts of money" because of errors by benefits staff.
Ann Bowtell, the department's senior civil servant, told the Public Accounts Committee of MPs that she regretted this "very, very serious error", during questioning on an audit report showing the highest levels of error since the overhaul of the social security system in 1988.
Alan Williams, Labour MP for Swansea West, seized on detailed figures in a report from the official accounts watchdog, the National Audit Office (NAO), which revealed that pounds 90m of arrears of severe disability premium had been repaid.
Although an average of pounds 2,600 each had been repaid to 35,000 people, in some cases for claims dating back to 1988, Mrs Bowtell accepted that some people had died before the errors were identified.
Mr Williams said: "This means people will have been dying in poverty and need when owed large amounts of money by your department, doesn't it?" Mrs Bowtell agreed.
The estimated value of errors in benefit payments rose from 2.1 per cent in 1988 to 5.1 per cent last year, according to the NAO audit of a sample of cases.
The auditors refused to approve the DSS's accounts for the seventh year running.Reuse content