The DWP’s latest error is ‘cheating’ people out of money

The latest error from the Department for Work and Pensions (DWP) has “cheated” people out of money they’re entitled to. It’s also lining the pockets of local councils. And the situation could also funnel money into the hands of private companies.

DWP: ‘don’t blame us, blame the system’

As The Canary previously reported, the DWP has overseen pensions chaos. It:

estimates it has underpaid 134,000 pensioners over £1bn of their state pension entitlement. Most of them are women, and some errors date as far back as 1985.

In January 2021, the DWP started an exercise to correct the errors. This was the ninth such exercise since 2018… The errors mostly affect widows, divorcees, and women who rely on their husband’s pension contributions for some of their pension.

The DWP blamed complex pension rules and a reliance on highly manual systems for the errors. And now, an independent journalist has exposed more wrongdoing on the DWP’s part.

“Pay out and grab back”

David Henke reported on a House of Lords session during which peers debated the pensions chaos. DWP minister baroness Deborah Stedman-Scott revealed that so far her department has paid back £60.7m to 9,491 people. Or, as Henke put it – paid back what it had “cheated” people out of in the first place. This works out at an average of around £6,295 per person.

Stedman-Scott confirmed that some older people are going to be stung by the repayments. This is affecting people who are in care homes or rely on social care. It’s happening because the DWP’s bulk payouts could push these people over the capital threshold where they have to pay for their care. It’s currently £23,250. Henke called the DWP’s handling of this a “pay out and grab back” scheme.

As he wrote:

Given that many care homes charge differential rates for people residing there – local authority rates are often lower than private rates – this could even be a new bonanza for care home owners – as they could get more money for providing the same services.

This is because council-run social care services are often outsourced to private companies – so therefore people end up technically paying them

Conscious cruelty or dire mismanagement?

Peers widely condemned the DWP. One of them said it was “hiding behind the skirts of local government”. Another peer suggested that the chaos would mostly hit women. Stedman-Scott said she’d speak to the Treasury and DWP boss Thérèse Coffey about law changes so people don’t lose out.

The initial fault for DWP pensions underpayments clearly stands with the department. But now, it’s knowingly ripping older people off after finally repaying the money it owes them. Thankfully, Henke is exposing this story, and The Canary will continue to follow as it progresses.

Featured image via Robert Prax – pixabay and UK government – Wikimedia