£340m bill for unpaid benefits to disabled

Tens of thousands of ill or disabled people were underpaid benefits by an average of around £5,000, the public spending watchdog has found.

An estimated 70,000 claimants transferred to Employment and Support Allowance (ESA) from other benefits since 2011 were underpaid – some by up to £20,000 – the National Audit Office (NAO) reported.

Meg Hillier, chairwoman of the Commons public accounts committee, hit out at the “shoddy administration” at the Department for Work and Pensions.

NAO chief Sir Amyas Morse said: “The facts of this case are that tens of thousands of people, most of whom have severely limiting disabilities and illnesses, have been underpaid by thousands of pounds each”.

The DWP estimates it will need to pay a total of between £570 million to £830m more ESA than previously expected by the end of 2022-23.

As well as the arrears dating back to October 21, 2014, the government will face higher ongoing payments due to the corrected claims.

The NAO report said: “The average underpayment is likely to be around £5,000 by mid 2018-19, with the department owning an estimated total of £340m in underpaid benefits.”