Parliament’s spending watchdog has reported significant issues within the Department for Work and Pensions (DWP), affecting over 200,000 pensioners, as reported by The Guardian.
These individuals collectively missed out on £1.3 billion last year due to poor record keeping. An earlier error also resulted in 165,000 pensioners not receiving £1.2 billion. The Public Accounts Committee’s yearly review highlighted that many pensioners have been financially disadvantaged due to the government’s failure to correct long-standing errors in the state pension system.
The committee’s report also highlighted extensive issues of fraud and errors within the pension and benefits system. These issues contributed an additional £8.2 billion to the benefits cost in 2022-23, a slight decrease from the previous year but still significantly higher than in 2019-20. Dame Meg Hillier, the committee’s chair, expressed concern over the persistently high levels of fraud and errors, noting that a return to pre-pandemic levels might not happen until 2027-28.
Universal credit, in particular, was noted for a high rate of overpayments due to fraud and errors, amounting to 12.8% or £5.5 billion in the last year. The DWP estimates that about 18% of universal credit claims, impacting over 800,000 people, involve some fraud. The committee recognised the DWP’s efforts to address these issues, including a £895 million investment in anti-fraud measures and setting annual savings targets. However, the committee added:
“DWP expects most of the savings to come from a £443m project to cleanse the benefit system of incorrect payments by reviewing some 8 million live universal credit cases over the next five years. The success of this project is dependent on DWP’s ambitious plans to scale up recruitment and productivity of the team reviewing the claims.”
A DWP spokesperson said:
“Our priority is ensuring everyone receives the financial support they are entitled to, and state pension underpayment rates due to official error remain low at 0.5% of expenditure. Where errors do occur, we are committed to fixing them as quickly as possible.
At the same time, we are cracking down on fraud with new powers which will root out those who try to steal from the most vulnerable while saving the taxpayer £600m over the next five years. This comes on top of the billions being saved through our counter-fraud plan and will be targeted at areas where fraud and error is higher such as universal credit.”