Hundreds of thousands of people are being forced to pay back benefits which they received due to errors made by the Department for Work and Pensions (DWP), new research has revealed, as campaigners urge Labour to take action.
Currently, agents are able to recover overpayment debts from a claimant by deducting a certain amount from their benefits. They will send them notice of this, and they are able to appeal, but the deductions will usually begin regardless.
In 2023/24, there were 686,756 cases of Universal Credit overpayment debts raised by the DWP which were identified as “official error”, research from Public Law Project (PLP) has revealed. This means it was the fault of the department that the inaccurate payments occurred – but the claimant remains liable to pay it.
The legal charity has helped several claimants win back thousands from the DWP in unfair overpayment cases. Alongside 30 other leading charities, it has now written to work and pensions secretary Liz Kendall to legislate to bring a legal end to the issue.
Signatories including the Joseph Rowntree Foundation and Age UK say the DWP approach to Universal Credit overpayments should be in line with housing benefits. In these cases, they are only recovered when the claimant could not reasonably have expected to have known they had been overpaid.
Shameem Ahmad, chief executive officer of PLP, said: “No one is expecting the DWP not to make mistakes. However, it is incumbent on the department to take responsibility for those mistakes, rather than pushing that burden onto people it should in fact be supporting.
“These official payment errors have real and highly detrimental consequences for people – causing sudden financial pressures and anxieties, through no fault of their own.
“This is the government’s chance to ensure it does not plunge hundreds of thousands of more people into debt, go some way in restoring public trust, and ultimately incentivise the DWP to not make errors in the first place.”
In 2023, PLP, alongside North Bristol Advice Centre, was able to successfully help a client have £8,623.20 in Universal Credit debt waived after winning a High Court battle with the DWP.
The overpayment debt had arisen from several mistakes by the department, despite the anonymous claimant providing agents will the information they had requested. In 2019, she told the DWP that one of her disabled sons enrolled on an apprenticeship, and was informed this would have no impact on her benefits.
But 18 months later she was told she had been overpaid over £8,600 and faced monthly deductions to pay the debt back. This came as a shock to her, and left her without enough money to live month-by-month.
The client told PLP: “When I was told I owed DWP over £8,000 I was in disbelief. Paying it back even at a small amount a month would have taken me years and meant making day to day sacrifices for my family. The worst part was I knew I had done everything right and DWP were in the wrong.
“While the process of going to court has caused me a lot of stress, I finally feel I’ve been heard and I hope my case can be used by others in the future. I would urge anyone that finds themselves in my position of being ignored by the DWP to get help and advice, as I could not have done this without North Bristol Advice Centre and Public Law Project.”
The DWP has disputed the figures shared by the PLP, and no longer records whether a payment has arisen from official error in its debt management system.
A DWP spokesperson said: “Overpayment by official error accounts for just 0.3% of our overall benefits spend, and we always work with people who have been overpaid to ensure repayments are affordable.
“We have an obligation to protect public funds and to ensure money lost to fraud and error is recovered, which is why we are bringing forward the biggest fraud crackdown in a generation, saving the taxpayer £1.5 billion over the next five years.”
It comes as the Labour government is expected to earmark billions of pounds in draft spending cuts to welfare at the Spring Budget, with the total spending at £64.7bn in 2023/24.
