DWP covers-up compensation deal for over 100,000 claimants

DWP logo and hands counting money representing cost of living payments
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The Department for Work and Pensions (DWP) has covered up a compensation deal potentially worth thousands of pounds for claimants. It relates to Employment and Support Allowance (ESA). A parliamentary watchdog told the DWP that it had to let over 100,000 claimants know about the potential payout. However, the department has refused to do so.

The watchdog slammed the DWP for this “injustice”. Now, a social security advice service is helping people get the money the DWP owes them.

DWP: underpaying claimants

Benefits and Work is an advice and support service for DWP claimants. It also publishes news about social security. On 30 August, it revealed that the DWP had hidden a compensation deal from claimants.

As Benefits and Work wrote, from 2011 the DWP began the process of moving claimants from the old Incapacity Benefit (IB) to the then-new ESA. However, during this, it was not checking whether it should’ve given people a higher rate of social security. The DWP was just giving people contribution-based ESA, which is based on a person’s National Insurance contributions. But it was not checking if they could also get the income-based payment. This is ESA based on how much you earn, the amount of savings you have, and so on. As Citizens Advice wrote:

If you’re already getting contribution-based ESA, you might be able to add income-based ESA to it. This could mean you’ll get more money.

The DWP gave this to claimants if, after they received contribution-based ESA, they still didn’t have enough money to live on. However, when it was moving people from IB to ESA, the DWP failed to check this for countless claimants. We now know that the DWP owes people money.

118,000 claimants missing out?

As Benefits and Work wrote, the DWP did a Legal Entitlements and Administrative Practices (LEAP) exercise:

Read on...

to identify claimants who had been victims of their error. This resulted in 118,000 claimants getting backdated awards of ESA, in many cases amounting to thousands of pounds. Others also got awards outside of the LEAP scheme.

But the DWP didn’t tell claimants they could also be entitled to:

special payments because they had missed out on other benefits or undergone hardship.

So, one claimant complained via a welfare rights adviser to the Parliamentary and Health Service Ombudsman (PHSO). The PHSO told the DWP that it had to pay the claimant £7,500 in compensation plus interest on backdated ESA payments.

Real-world consequences

The PHSO wrote that the claimant, “Ms U”, was:

a seriously ill woman [who] had her benefits payments severely cut by around £80 a week… leaving her unable to heat her home and buy food.

It continued:

As someone recovering from heart bypass surgery and managing multiple health problems including an autoimmune disease, severe mental health problems and hypertension, this had a devastating impact on Ms U’s health, wellbeing and finances. For five years she received only around half the amount the government says is the minimum requirement for a person with severe disability needs.

Ms U could not afford to heat her property or buy the food she needed to stay healthy. Her mental and physical health declined drastically – her hair fell out, she lost weight and her mental health deteriorated.

The error also prevented Ms U from getting other benefits she was eligible for, including free medical prescriptions to manage her many health issues, funding to buy a washing machine and urgently needed dental care. She was at risk of hypothermia and her arthritis got worse because she lost out on £700 in Warm Home discounts.

Ms U’s situation may also be the case for thousands of other claimants.

The DWP says…

The Canary asked the DWP for comment. We specifically wanted to know why it failed to follow the PHSO recommendations and kept the information around compensation from claimants. A spokesperson told us:

Our priority is that all people get the financial support to which they are entitled. We completed a special exercise to correct these past underpayments in ESA, ensuring that all those eligible received the arrears they were entitled to.

The exercise concluded in June 2021. We made 118,000 benefit arrears payments in full, totalling £613m.

Meanwhile, the PHSO had previously slammed the DWP for its actions.

DWP: covering up

The PHSO told the DWP that it should contact claimants who it gave backdated payments to. It said the department should tell them they could also get compensation. Of course, the DWP refused to do this. As Benefits and Work wrote, it said:

should a claimant feel that they should receive compensation due to their individual circumstances, they can contact the department and set out their reasons. All requests received will be considered on a case by case basis.

The PHSO was not happy. It wrote in January that the DWP had subjected claimants to an “injustice”, and:

It is human to make mistakes but not acting to right wrongs is a matter of policy choice. In this case, that choice has been made by the very organisation that is responsible for supporting those most in need.

That those affected are unable to claim compensation for this error is poor public policy in practice, and the situation is made worse given that they have already waited years to receive the benefits to which they are entitled.

Benefits and Work said that:

The DWP know very well that almost none of the affected claimants will ever discover that they might be entitled to compensation and thus they will never know to ask for it.

Another example of the DWP’s systemic neglect

Benefits and Work has created sample letters that claimants can send to the DWP to try and get what it owes them. You can download the letters here.

The situation is yet another example of the DWP’s systemic neglect and wilful mistreatment of claimants. A similar situation happened with Universal Credit – despite judges ruling against the DWP, it fought to deny severely disabled people the money they were entitled to. It’s currently in an ongoing court battle over its denial of the Universal Credit £20-a-week uplift to ESA claimants, too.

The DWP’s abuse of claimants like this is nothing new. It’s now facing another investigation by the UN over its treatment of chronically ill and disabled people. But external investigations alone are not good enough. Everyone needs to be fighting back against the DWP’s systemic abuse of social security claimants. It’s more important than ever.

Featured image via pixabay and Wikimedia

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