The Department for Work and Pensions have admitted they are having to fork out over £1.5bn as part of a process to correct underpayments which were made while claimants were being moved over onto ESA.
Some have already received as much as £10,000, with the average back payment totaling at around £5,000 per claimant.
In a document released by the department yesterday, they claim the errors were made between January 2011 and October 2014, when ” some people receiving Incapacity Benefit and Severe Disablement Allowance had their claims converted to contributory ESA,” the document stated.
It continued: “However, the possibility of whether they may also have been entitled to income-related ESA was not considered for all cases. This means they may have missed out on the payment of premiums, such as the Enhanced Disability Premium.”
While the DWP believed they were legally restricted to only make repayments from 2014 per legal advice given to them, an action brought forth in March 2018 by the Child Poverty Action Group raised new evidence, which forced the DWP to issue back payments from the date of conversion to ESA.
The DWP is currently in the process of reviewing a total of 570,000 ESA cases which they believe could have been affected in the changeover, with the bulk of the review to be completed during 2018 and 2019.
The backdated payments will total £970m, but with the added total cost of ongoing ESA awards which will cost the DWP an additional £700m until 2024-25, the combined total cost is a staggering £1.67bn.
Speaking to the BBC, MP Frank Field, chair of the Commons Work and Pensions Committee, said: “It is welcome news that the government is finally making progress towards repaying people who have missed out on ESA.
“Its best estimate is that it owes claimants £970m – but the final bill could be even higher. The government must learn lessons from this appalling failure, as it faces the much bigger challenge of moving people onto Universal Credit.”Get your copy of UNITE Magazine
Image: Flickr/Howard Lake