﻿A council has criticised the “bizarre” reluctance of welfare officials to act after it alerted them to benefits overpayments worth hundreds of thousands of pounds caused by universal credit system errors.

Tower Hamlets council said the Department for Work and Pensions (DWP) would regularly take months to rectify incorrect payments despite repeated written reminders, even when they were told people ineligible for benefits were claiming universal credit.

In one case, the DWP reportedly insisted on paying a claim despite a warning that not only was the claimant most likely ineligible for benefits, as they had been living abroad for 10 months, but that police had recently raided their address and closed down a brothel.

A report by Tower Hamlets council’s benefits team said it had uncovered 539 DWP administrative mistakes in less than a year, which led to hundreds of claimants being underpaid by up to £8,000 or overpaid by up to £25,000.

The mayor of Tower Hamlets, John Biggs, said the dossier of costly blunders showed that universal credit was “riddled with errors and systemic faults” and was causing chaos and misery for many claimants.

In 2018-19, £194,000 of universal credit overpayments were made to Tower Hamlets residents by the DWP. The average overpayment was £4,500 and about £150,000 of underpayments were made at an average of £104. The council currently has 197 universal credit queries lodged with the DWP.

Errors uncovered by the council and reported to the DWP include:

• A claimant whose partner died and whose children were taken into care was subsequently paid £2,000 of benefits he was ineligible for each month – eventually landing him with £18,000 of overpayments he must now repay. The council sent nine emails to the DWP pointing out the error but was ignored for 10 months.

• A woman who had to claim universal credit when her pensioner partner died was awarded only half the housing support payment she was due – a £78 per week underpayment – because the DWP had treated her deceased partner, whose name was on the tenancy agreement, as a joint tenant and incorrectly decided she was only entitled to housing costs equivalent to half of her full rent liability.

• Four cases where the council spotted that universal credit was being paid to individuals who had been subject to successful DWP benefit fraud investigations involving a range of benefits. Ironically, the DWP had previously notified the council of the individuals’ misdemeanours, indicating they were ineligible to claim benefits.

The council said that, in most cases, the DWP “would not act” after it notified them of the errors. It said the Tower Hamlets benefits team were told the DWP was powerless to correct an error unless it was personally notified of it by the individual claimant. Most claimants were unaware of the errors, the council said.

The case of the payment made to the claimant who was living abroad was brought to the council’s attention by a social landlord who said he had been asked by DWP to provide proof of rent to speed up processing of the claim.

When the landlord raised concerns about the tenant’s eligibility, the DWP reportedly told the landlord it was not their job to assess universal credit eligibility and insisted that rent details were provided. The claim was paid and the landlord has started repossession proceedings on the property.

The DWP said it could not comment on the outcomes of individual issues raised by the council for data protection reasons. A DWP spokeswoman said: “The vast majority of universal credit claims in Tower Hamlets are paid in full and on time, while a DWP specialist works closely with the council to ensure they are fully equipped to support claimants.

“It’s important that people report any changes in their circumstances to ensure they receive the right benefits. People can talk to us about their claim online, over the phone or by coming into the job centre.”

The report says that DWP staff often did not grasp changes to universal credit guidance, for example over whether it or the council should pay housing support for homeless claimants. “In these cases, council staff have had to explain to universal credit staff what their own rules and regulations are,” the report says.

It describes the current council-DWP liaison arrangements as “bizarre”, “not fit for purpose” and more inefficient than the previous system. Its comments echo difficulties reported by welfare rights advisers who found that new confidentiality rules under universal credit meant they could no longer directly resolve errors on behalf of their clients unless they could prove a complicated series of client permissions.

The council spotted the errors during routine checks on universal credit data while processing housing benefit and council tax reduction claims. It appointed a full-time staff member to monitor universal credit claim accuracy and believes it would uncover even more errors with more resources.

Biggs said: “The reality of these errors can be life-changing for those who rely on benefits, whether through underpayments meaning people struggle just to get by, or enormous overpayments which the DWP has to reclaim from the person affected.

“Universal credit is clearly not fit for purpose and it’s falling on our own benefits service to highlight and pursue errors which the DWP shouldn’t be making in the first place.”