ESA payments error: tens of thousands on benefits to receive £5,000 refund

DWP will pay out more than £1.5bn after ‘shoddy administration’ meant about 180,000 people did not receive benefits they were legally entitled to

May Bulman
Social Affairs Correspondent
Friday 05 April 2019 10:47
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May Bulman: 70,000 disabled people owed thousands in benefits due to government error

Tens of thousands of disabled people are set to receive backdated benefit payments averaging £5,000 following a government error.

The Department for Work and Pensions (DWP) has revealed it will pay out more than £1.5bn after “shoddy administration” meant about 180,000 people did not receive benefits they were legally entitled to.

Ministers have been accused of creating a “hostile environment for sick and disabled people” following the blunder, which occurred when claimants were transferred onto the main sickness benefit, employment and support allowance (ESA).

The fault was first thought to have shortchanged 70,000 claimants over seven years, but a government document published on Wednesday shows it is expected to have affected far more people, with the estimated back payments bill having risen from £340m to £970m.

The average underpayment for each claimant is estimated to be about £5,000, but some people will be owed significantly more, with approximately 20,000 having been underpaid around £11,500 and a small number owed as much as £20,000.

Initially, the government said there would be up to £150m that may never be paid back because arrears would only be accounted for as far back as 21 October 2014, the date of a legal tribunal ruling – meaning some would never have been reimbursed.

But following legal action, ministers made a U-turn in July and announced it would pay back the thousands of disability benefit claimants in full.

Reacting to the news, Marsha de Cordova, Labour’s shadow minister for disabled people, accused the Conservatives of creating a “hostile environment for sick and disabled people”.

She continued: “Disabled people have been short-changed and denied the social security they were entitled to. The government must ensure that disabled people who have been so unfairly treated are properly compensated.”

Richard Kramer, chief executive of disability charity Sense, said he welcomed the news that ministers were "getting to grips" with the problem, but said it was important that there are no further delays to backdated payments.

"We must now see reform to a system that undermines disabled people, rather than engages and supports them. This includes an overhaul of the assessment process, which we know can be fraught with error, frustrating and humiliating,” he added.

The government said it was in the process of reviewing about 570,000 ESA cases that could be affected, and that it expects to complete the process by the end of 2019.

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.”

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