DWP under fire as it denies 118,000 compensation despite its major error

The Department for Work and Pensions is refusing to pay compensation to more than 100,000 people who may have suffered a "devastating impact" on their lives due to its "catastrophic error". Here's what we know.
Benefits cash

At least 118,000 sick or disabled Britons wrongly had their benefits slashed - many for years - when they were transferred from Incapacity Benefit and similar benefits to a sickness payment called Employment and Support Allowance (ESA).

An oversight in calculations meant one woman, Mrs U, was underpaid £80 a week for five years leading to disastrous consequences.

She only received payments based on her national insurance contributions, when it should have been based on her income.

She missed out on free prescriptions and £700 in Warm Home discounts, as well as funds to help buy a washing machine. Because she couldn't afford to heat her home Mrs U's arthritis got worse and she risked hypothermia and didn't have enough money for food.

Her hair fell out, her mental health deteriorated and she lost weight, an investigation by the Parliamentary and Health Service Ombudsman (PHSO) found.

The DWP awarded Mrs U back payments of £19,832.55 as well as £7,500 compensation as ordered by the PHSO.

After reviewing hundreds of thousands of cases, it is now issuing back payments to the other 118,000 people affected by its error, but is not paying compensation.

The PHSO recommended the DWP reconsiders its decision to rule out compensation for all victims.

Ombudsman Rob Behrens said: "We don't know how many more Ms Us there are out there.

“That is why I urge the DWP to allow people affected to claim for compensation in recognition of its error and the potentially devastating impact it has had on people's lives."

Louise Rubin of disability charity Scope said: “This catastrophic error will have left many disabled people and their families struggling to make ends meet.

“Disabled people shouldn’t have to fight for support. It’s only right that the Government now ensures all those who missed out can claim compensation.”

The DWP did not rule out issuing compensation to some of the 118,000 victims but said those who feel they are owed need to apply. The PHSO said people can appeal by contacting their local council's welfare rights service or by speaking to an advice agency such as Citizens Advice.

The DWP said it had so far handed out £613 million in back payments after reviewing 600,000 cases last year.

David Rutley, Parliamentary Under-Secretary of State for Welfare Delivery, added: “In these situations we are typically not compelled to come forward with blanket compensation payments.

“If people want to contact us at DWP, if they believe they should be eligible to have further compensation, they can contact through the various helplines that have been set up... and if they prefer, they can go through the complaints process.

“We all make mistakes - this was clearly a big one.”  


Our team of writers has expertise in business, car, travel, home and pet insurance as well as personal finance issues.


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