Over 300,000 benefit claimants owed money after PIP errors lead to millions in underpayments

The government has admitted to several errors which means claimants are ‘owed money’

Hundreds of thousands of disabled people are owed money from the government after it admited to major errors while paying out the Personal Independence Payment (PIP).

More than £260 million has already been paid to make up missing funds to those who saw the benefit wrongly denied or underpaid by the Department for Work and Pensions (DWP).

But there are still more than 300,000 claimants owed money, with some payouts potentially reaching more than £2,000.

Claimed by 3.7 million people, the health-linked benefit is designed to help with extra costs incurred by living with an illness or disability. It recently made headlines for being at the heart of Labour’s planned welfare reforms, before a last minute change of direction from the government.

There are still more than 300,000 claimants owed money, with some payouts potentially reaching more than £2,000 (Getty/iStock)

In its latest annual report, the DWP identified three errors in the administration of PIP – two for the first time – which has forced it to carry out several payback schemes.

The largest relates to a Supreme Court decision that changed how the DWP had to consider one specific criteria for a person to qualify for PIP – the ability to engage with people face to face – effectively making it more lenient.

There are around 325,000 claimants who may still be due payments for the issue, with 308,000 cases already reviewed reviewed. The total amount paid out is now £250 million, meaning compensation has been worth at least £800 per person and as not all cases reviewed with result in a payout, likely even more.

Meanwhile, the first new issue saw a number of claimants that did not provide a National Insurance Number when applying for PIP have their applications processed incorrectly. This is despite it not being a requirement to supply the information to apply.

Sir Stephen Timms announced the climbdown in the middle of the debate on the legislation (Jonathan Brady/PA) (PA Archive)

So far, only 455 records have been reviewed over this issue, with £500,000 paid out overall. This means payouts have been worth at least £1,098 per claimant.

The next newly-identified issue relates to thousands of claimants in Scotland who transferred from PIP to the Adult Disability Payment, which has replaced the benefit for Scottish residents.

An estimated 4,867 were identified as potentially having their payments suspended during the transition, with only 176 cases left to review. So far, £13 million has been paid out over the issue, meaning an average payment of at least £2,771 per claimant.

The issues come as criticism continues to grow over the management of PIP by the government. Following Labour’s decision to back down on changes that would effectively make the benefit harder to claim, it was confirmed that social security minister Stephen Timms would carry out a review of the effectiveness of PIP in meeting the needs of claimants.

A DWP spokesperson said: “We are fully committed to identifying claimants that are owed money and providing the financial support to which they are entitled as quickly as possible.”