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Around 75,000 claimants have been underpaid ESA but won’t get all their money back

04 January 2018

The DWP is contacting around 75,000 claimants who may have been underpaid employment and support allowance (ESA) following their transfer from incapacity benefit.

ESA was introduced in 2008. In 2011 the Department began reassessing people claiming pre-existing incapacity benefits to see whether they were eligible for ESA. The previous benefits included incapacity benefit, severe disablement allowance and income Support.

In a written statement to the House of Commons, Secretary of State for Work and Pensions David Gauke has confirmed that in 2013 he was made aware of individual cases which were transferred in error to contributory ESA, rather than to income-related ESA,

In these cases, incapacity benefit claimants had an unidentified entitlement to additional benefits such as the enhanced disability premium. These premiums are only payable to those on income-related benefits.

From 2014 additional DWP guidance was put in place to ensure all claims transitioning from that point forward were more fully assessed for both contributory and income-related ESA.

At the time officials did not identify the need to explore the potential impact of the earlier error. This was reconsidered in the light of analysis following the preliminary Fraud and Error statistics published in May 2016.

As a result of a sampling exercise, the DWP estimates that around 75,000 claimants may have been underpaid - about 5% of those people who moved over from incapacity benefits.

In his written statement, the Minister says that the DWP has established a special team to begin contacting all claimants it believes may be affected and that –

“There is therefore no need for individuals to independently contact the department on this matter. Once an individual is contacted and subject to establishing the relevant information, we expect to make a decision on each case and repay the appropriate arrears within 12 weeks. The Department expects to complete the review and correct cases during the course of 2018/19.”

However, he then adds that –

“This relates to a specific group that transferred to contributory ESA between 2011 and 2014, for which applicable underpayments will now be corrected and paid. Arrears are payable to those who qualify from 21 October 2014 following an Upper Tier Tribunal ruling in the case of LH v SSWP on that date. Under Section 27 of the Social Security Act 1998, when a tribunal establishes the meaning of a legislative provision, payments of arrears which pre-date the tribunal ruling are barred.”

DR UK’s Welfare Rights Adviser Ken Butler said –

“The DWP’s belated recognition of the scale of this problem is to be welcomed and its commitment to begin a review to identify those claimants who were affected.

However, given that the DWP admits it knew of the problem back in 2013 and that income related ESA was rightly payable, it is unacceptable for it to limit ESA arrears back to October 2014.

Hopefully, this stance will be overturned by a future Upper Tribunal. In the meantime, those disabled people denied full ESA arrears should consider formerly challenging that decision.”

The Minister’s written statement is available @ http://www.parliament.uk/business/publications/written-questions-answers-statements/written-statement/Commons/2017-12-14/HCWS356/