Labour blast welfare ‘shambles’ as ministers forced to shell out over £1bn on benefits blunder

Ministers have been accused of presiding over a “shambles” after it was revealed they owe more than £1bn in back payments to tens of thousands of claimants who were underpaid.



Claimants affected will be handed an average of £5,000, as the Department for Work and Pensions (DWP) admitted it would need to shell out more than £1.5bn to cover the an “historic error”.

The fault, which is said to have hit 180,000 people in receipt of Employment and Support Allowance (ESA), dates back to between 2011 and 2014 when claimants were switched over from incapacity benefit.

Ministers say around 105,000 people should be repaid in 2018-2019 with a further 75,000 by 2019-2020 - although they previously stated that all overdue payments would be completed by April 2019.

The department says while backdated payments amount to £970m, a larger bill for ongoing ESA instalments could cost the department an extra £700m until 2024-25 - therefore totalling £1.67bn.

Labour’s Shadow Minister for Disabled People, Marsha De Cordova, said the “shambles at the heart of the DWP becomes more and more obvious every day”.

“Disabled people have been short-changed and denied the social security they were entitled to,” she said.

“This mess is another example of how the Conservatives have created a hostile environment for sick and disabled people.

“The Government must ensure that disabled people who have been so unfairly treated are properly compensated. A Government that forces disabled people into debt and even makes some destitute is a disgrace.”

A DWP spokesperson said: “Anyone affected by this historic error will receive all of the money they are entitled to.

"That is why we have created a dedicated team of over 400 staff to examine cases, and have paid back around £120m so far.

"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."