Five thousand sick and disabled people who were underpaid in government benefits have died before they could be reimbursed, figures show.

Around 70,000 claimants were short-changed over seven years after “shoddy administration” in the Department for Work and Pensions (DWP) meant people did not receive benefits they were legally entitled to.

Ministers were accused of creating a “hostile environment for sick and disabled people” following the blunder, which occurred when claimants were transferred onto the main sickness benefit, employment and support allowance (ESA).

Now it has emerged in official figures published on Thursday that 5,000 people who qualified for arrears payments died before they were able to receive them — in what has been branded a “national scandal” by Labour.

The figures show that of the 600,000 cases the DWP is currently working through to identify who was short-changed, around 50,000 are those of people who are now deceased.

Overall, 112,000 people have been repaid an average of £5,000 each — totalling £589m in refunds. A total of £16m has been paid out for those who have already died, with on average £3,000 reimbursed for each, a sum that automatically goes to their next of kin.

Labour MP Marsha de Cordova said the fact that so many deceased people never got their rightful support allowance was “disgraceful” and condemned the government for the “continued delay in righting this wrong”.

The underpayments scandal, exposed by the National Audit Office (NA) in March 2018, meant people unable to work due to their disability would have lost out on up to £75 a week on the payments, which are designed to help them pay for basic living costs.

The DWP identified that errors were being made as early as 2013, but despite two key Upper Tribunal cases, which helped clarify the law on ESA claims as far back as June 2014, the department did not begin identifying the people affected until July 2017, the NAO found.

Initially, the government said there would be up to £150m that may never be paid back because arrears would only be accounted for as far back as 21 October 2014, the date of a legal tribunal ruling — meaning some would never have been reimbursed.

But following legal action, ministers made a U-turn in July and announced the government would pay back the thousands of disability benefit claimants in full.