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Underpaid in 2022: Claimants losing out on DWP benefits

25 Mar 2022 | Author: PaulB

Since 2018, the Department for Work and Pensions (DWP) has undergone nine exercises to correct their errors which have resulted in UK residents – pensioners in particular – being significantly underpaid when it comes to pensions and benefits facilitated by the DWP.

Due to outdated systems and a significant reliance on manual processing, the DWP have admitted that it has potentially underpaid 134,000 pensioners over £1 billion, dating as far back as 1985 in some cases.

With regards to the housing benefit the department is responsible for, the DWP has found that around 22,500 people could be affected – and underpaid as a result – by an error that dates back to 2011.

Additionally, around 118,000 people with disabilities and health conditions could be affected due to a system error that goes as far back as 2016.

Claimants receiving Employment Support Allowance (ESA)

Employment Support Allowance (ESA) is one of the four benefits our specialists assist claimants with.

Pay-outs for this benefit, which is paid to those who need financial assistance due to a medical condition or disability, have been substantially affected due to a system error that took place six years ago. Those who have been receiving the ESA benefit were found to be paid short and the DWP has since had to hand out backpay to the value of £613 million to those affected by the error.

Claimants receiving housing benefits

As mentioned above, UK residents who claim a housing benefit could also be seriously underpaid. The DWP says, since recognising an error on their part, they have been working with local councils to identify those who have been underpaid.

Claimants receiving pensions

In January last year, the DWP undertook an investigation to identify pensioners who have been underpaid due to an error. This mostly affects women, widows, divorcees, and women who rely on their husband’s pension contributions. The DWP is pinning this error on outdated systems and the amount of manual work that takes place to facilitate benefit pay-outs.

What is the cost of being underpaid in 2022?

The truth is these errors and system issues on the part of the DWP are nothing new. In 2018, the BBC discovered that the department had been underpaying at least 75,000 ESA claims as far back as 2011.

We know of one case where a claimant had been underpaid for a benefit since 2012 and ended up having the DWP owe her over £17,000. In another case, a pensioner couple had been underpaid £200 per week for several years, resulting in them being paid a lump sum of £15,000.

Not all the amounts being underpaid are massive, but at a time where fuel prices are high and the cost of living is increasing, even being underpaid £13 per week – which we found was the case with a pensioner we assisted recently – is a lot.

What is the plan moving forward?

The DWP is contacting those who they have identified as being underpaid and are paying out lump sums to them.

However, the exercise to rectify the many errors experienced over the past few years is going to cost over £24.3 million in staff costs by the end of 2023. This is because experienced and specialised staff are being moved away from their usual responsibilities to handle the effects of the past errors.

This is also leading to a backlog in processing new claim applications. In turn, there is now a greater risk for errors to be made on new applications for underpayments.

The fact of the matter is that those claiming benefits from the DWP have the chance of being gravely underpaid. Unless you are entirely clued up on how much money you should be receiving based on all the variables of your case, it’s difficult to know how much you should be paid out and whether the DWP is making an error. The evidence above shows that the DWP has faced several errors and system issues in the past, meaning hundreds of thousands of UK residents are being underpaid.

For more information about what benefits you may be eligible and for expert advice as to how much you should be receiving, contact us via our website.

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