Exclusive: DWP has saved over £75 million by losing 70,000 ESA underpayment claimants

The DWP has closed the cases of 70,000 employment and support allowance (ESA) claimants it was attempting to contact about possible underpayments because it has lost track of them, a Freedom of Information request by Benefits and Work has revealed. The department will save over £75 million in arears payments as a result.

The underpayments came about when claimants were transferred from incapacity benefit to ESA between 2011 and 2014, but the DWP failed to identify many thousands of cases where the claimant should have been entitled to additional premiums.

In a report released in January 2020, the DWP revealed that 581,000 cases out of 600,000 had completed ‘the reassessment journey’ and that 112,000 had been paid arrears as a result.

The report stated that the completed cases included claimants “who have not responded to multiple attempts to contact by phone or post over an 8-week period”.

The report did not say how many claimants were in this category, but we can now reveal that the total is 70,000 up to January 2020.

This means that around one in eight claimants has been lost by the DWP, largely because of the huge time lag between the problem of underpayments being identified and the DWP taking action to contact affected claimants.

112,000 of the 511,000 claimants the DWP managed to actually find have received a back payment averaging £5,000 each.

If a similar proportion of missing claimants was entitled to a back payment, this would amount to over 15,000 claimants the DWP have avoided paying.

It also means the DWP have pocketed over £75 million it owes to claimants with some of the most severe health conditions.

The DWP told us:

“Out of the 581,000 cases that had completed the reassessment journey, there were 70,000 cases that had been closed because claimants, former claimants or next of kin had not responded to multiple attempts to contact them over an eight-week period. Attempted contacts by the Department included sending four letters and a minimum of two attempted phone calls. Where people who have not responded do later get in touch we restart the claimant journey.”

However, claimants living in often insecure short-term private tenancies may have moved several times over the years since they were underpaid by the DWP.

Simply writing repeatedly to their old address and phoning an out-of-date number is unlikely to be an effective method of finding them.

It is hard to believe that a department with the resources and data available to the DWP could not make more effective efforts to find people it has deprived of desperately needed income, to which they were legally entitled.

But without a great deal of pressure from MPs and ministers, the DWP has no incentive to go the extra mile.

And 75 million reasons to let the matter drop.