180,000 employment and support allowance (ESA) claimants who were underpaid when they were transferred from incapacity benefit are expected to receive an average award of £5,000 each in back payments over the next two years. The total payout is expected to be around £970 million.
The figures were revealed in a DWP report published last week. They are a massive increase on the original estimate by the National Audit Office in March of this year, when it was believed that there was around £340 million in underpaid benefits.
The underpayments came about because the DWP failed to award income-related ESA to many thousands of claimants who were transferred from incapacity benefit to contribution-based ESA from 2011 onwards.
Originally the DWP was refusing to backdate payments to before a court case in March 2014. However, they have now been forced to make back payments all the way back to the date of the original conversion decision in each claimant’s case.
This has meant that many more people are entitled to compensation, or to more compensation than was originally agreed. In addition, when detailed checking began, the DWP found a much higher level of missed payments than their original sample had suggested.
As a result, the number who may be entitled to a payment has risen from an estimated 70,000 to an estimated 180,000.
The DWP expect to make back payments to around 105,000 claimants in 2018/19 and a further 75,000 in 2019/20. The average award is expected to be in the region of £5,000.
