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The government has been accused of "chaos" after it vastly overestimated the number of benefit refunds to sick and disabled people.

The Department for Work and Pensions (DWP) has slashed 90,000 people and £310m from a forecast of people who'll be paid back the benefit ESA.

A blunder dating back to 2011 meant thousands of claimants were awarded too little ESA - worth up to £111.65 a week - when they moved over from old-style incapacity benefit.

Since 2017, the DWP has been working through 600,000 cases to check who was short-changed - and given back payments worth an average of £6,000.

But this week it emerged an earlier estimate that 210,000 people would get refunds worth £920m was, in fact, wildly incorrect.

Now the DWP estimates 120,000 people - almost half the previous number - will get back payments worth a lower total of £610m.

(Image: Getty Images/EyeEm)

DWP officials said the number of people entitled to a refund were "lower than forecast" after actual data replaced what were only estimates.

And they said more cases than expected turned out to be in the 'work-related activity' group, who even if affected, would not be due a higher amount of money.

The DWP said 1,100 dedicated staff tasked to trawl through the cases were making "good progress" and made predictions more accurate.

But Labour blasted the change to the forecast - which is the third after previous estimates put the number of people hit at 70,000 and 180,000.

Shadow Minister for Disabled People Marsha de Cordova said: “The Government has repeatedly dodged accountability for the catastrophic error of ESA underpayments.

"These latest forecasts reveal the chaos at the heart of the DWP, which has once again changed the number of those affected.

(Image: GetWestLondon)

“It is staggering that the estimated numbers of those owed money has changed by 90,000 cases, undermining trust in the repayment process.

“ Labour is clear that the victims of these errors must be repaid as quickly as possible. It is disgraceful that the Coalition and Conservative Governments have failed to right this wrong.”

The blunder happened when people were put on the wrong system when they moved from the old incapacity benefit to "contributory" Employment and Support Allowance (ESA).

The total bill by March 2025, including ongoing higher payments, is now expected to be £1.18bn - down from a previous estimate of £1.67bn.

As of October 13, all but 90,000 of the 600,000 cases that need checking have been completed with the final ones due for completion by March.

Some 100,000 people have received back payments totalling £552m.

DWP officials said: "There are lower average arrears payments than forecast, smaller than expected changes to the value of ongoing awards, and a smaller number of cases owed arrears.

"The Department has maintained a thorough process for reviewing cases throughout the exercise to ensure those who have been affected are identified and paid the arrears they are due."

The scandal has been going on for so long that 1 in 12 of all cases to be checked involve people who had already died.

Yet only 1,000 of those who died have so far received any back payments for their family.

DWP officials said an unknown number of relatives had not responded to "multiple attempts" to contact them by phone or post over 8 weeks.

A DWP spokesman said: “As our work progresses, we are able to more accurately understand how many people are affected.

“We are making good progress towards ensuring everyone receives the benefits they are entitled to and no one misses out.”