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More than 100,000 sick and disabled people will be paid £1BILLION of benefits they were denied after a huge government error.

The scandal was first exposed last year, but today it emerged the number of victims - and the bill to taxpayers - have both soared.

It means many more thousands of ill and disabled claimants in Merseyside could be in line for cash refunds.

The fault was first thought to have shortchanged 70,000 Employment and Support Allowance (ESA) claimants over seven years.

But Tory ministers now admit the total number of people who could be owed money has more than doubled to 180,000. And the estimated back payments bill has risen from £340million to £970million.

Find out if you're affected in the Q+A below

The sum puts huge strain on government finances just a day after leaked plans emerged to spend hundreds of millions of pounds improving six-in-one benefit Universal Credit.

Struggling sick and disabled people lost out by around £5,000 each in the blunder - with some owed £20,000.

The bill has partly increased due to a major Tory U-turn in July.

Previously the Department for Work and Pensions (DWP) only planned to refund people for benefits they were denied after 21 October 2014.

(Image: PA)

But facing a legal challenge, T ory welfare chief, Liverpool-born Esther McVey caved to calls to refund people all the way back to 2011.

The bill has also increased due to extra evidence gathered by a a 400-strong DWP team who are still reviewing 570,000 cases.

MPs previously said the disaster showed 'weakness at the highest level of government' while the National Audit Office condemned ministers for failing to get a grip.

Labour MP Neil Coyle said: “This has revealed even more chaos at DWP with thousands more disabled people denied vital help”.

Rob Holland, co-chair of the Disability Benefits Consortium which represents 80 charities and campaign groups, said: "It’s welcome that the Government has been able to identify the thousands of sick and disabled people who have missed out.

"Close to half of those living in poverty are disabled or live with a disabled family member and have little in the way of a financial safety net.

"Given this, in addition to making sure disabled people are paid the money owed from this error, the Government must look to the forthcoming Budget to reverse the cuts built into the new Universal Credit as well.

"To not do so risks pushing many disabled people further into poverty.”

Today's latest estimates, released by the DWP, show £810million in arrears will be paid to 105,000 people between now and April 2019.

Another £160million in arrears will then be paid to an estimated 75,000 people in the 2019/20 financial year.

On top of this, the DWP will also have to continue funding people's higher benefit claims as time goes on. This will cost £60million in 2018/19 and £130million in 2019/20, the figures show.

These costs will then gradually reduce as ESA claimants are moved on to Universal Credit.

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The blunder emerged when officials discovered some people transferring to ESA from an older system were put on the "contributory", not the "income-based" system.

This meant they had been missing out on payments such as the severe disability premium, which is worth £62.45 per week.

Around 18,000 claimants have already been handed £120million in back payments - averaging about £7,000 each.

A DWP spokeswoman said the 400-strong team of staff is now being expanded further to deal with extra cases.

"Anyone affected by this historic error will receive all of the money they are entitled to," she said.

"We have worked with charities and other disability organisations to make sure that we are providing the right support to all affected claimants and are hiring and allocating more staff to do that."

Key questions answered

How do I know if I am affected?

Those affected are largely people who converted from incapacity benefit, an old-style benefit, to the "contributory" version of Employment and Support Allowance (ESA).

The DWP says it will work out who is owed money and contact them proactively - with no need for you to contact the DWP yourself.

However, critics say payments have been sluggish and some have contacted the DWP directly in a bid to speed up their case.

How will I be paid?

Once people are contacted by the DWP and "relevant information gathered" they can expect to receive back-dated payments within 12 weeks.

They will be given a freephone number to track their case or ask questions.

When will I be paid?

The DWP aims to process all "initial" cases - those whose cases post-date 21 October 2014 - by April 2019. There are 105,000 of these people.

On top of this, an estimated 75,000 people could then be paid in the 2019/20 financial year.

These will be people who were converted from incapacity benefit to contributory ESA before 21 October 2014.