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DWP to pay out £970 million in ESA underpayments

17 October 2018

Department for Work and Pensions (DWP) underpayments of ESA following Incapacity Benefit reassessments.

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Earlier this year, a report by the National Audit Office and a Public Accounts Committee report estimated 70,000 disabled people had been underpaid ESA following their migration from incapacity benefit. This was due to the DWP’s failure to consider if they qualified to be paid top up income-based ESA.

Both held this situation to have been entirely avoidable and criticised the DWP’s failure to design a process that reflected ESA legislation or to listen to its staff, claimants and stakeholders and who drew attention to the problem.

The DWP has begun the process of reviewing around 900,000 ESA cases to identify those that could be affected. It expects to complete its review and pay arrears to all cases back to their date of conversion to ESA by the end of 2019.

The Department is looking at 570,000 ESA cases that could be affected. It expects to complete checking 320,000 (270,000 have been started so far) cases during 2018/19.

A further 250,000 cases are planned to be looked at by the end of 2019.

DWP estimates it will pay out £970 million as underpayments between 2018/19 and 2019/20. It will also be paying higher awards to claimants after their claim is corrected.

Affected claimants could be due around £5,000 in arrears though, so far, the average arrears payment to date is around £7,000.

Disability Rights UK Deputy CEO Sue Bott said,

“The DWP has known about these underpayments since 2013. They spent five years trying to hide behind constructing a legal argument as to why they shouldn’t pay up despite the hardship they have caused to tens of thousands of disabled people. 

“Earlier this year, thankfully, they abandoned that approach. 

“We urge DWP to urgently ensure all underpayments are rectified as soon as possible. This has gone on far too long. Enough is enough.”

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