£1.6bn payout over disabled benefits fiasco

Claimants to get £5,000 cheques

TENS of thousands of disabled people will receive backdated benefit payments averaging £5,000 following a catastrophic Government error.

The Department for Work and Pensions revealed it would be paying out more than £1.6billion to sickness benefit claimants.

Some people have already received cheques for more than £10,000.

The mistaken calculations were made when people were moved on to the main sickness benefit, the Employment and Support Allowance.

An estimated 180,000 people are due payments totalling £970million after receiving less ESA than they were entitled to.

It is estimated that the cost of paying them will add £ 700million over the next seven years, taking the total additional bill to £1.67billion.

It noted: ‘ The department estimates it will pay £970million in historic underpayments largely over the financial years 2018/19 and 2019/20.

‘In addition, it will pay higher awards to active claimants after their claim is corrected.’

The payout results from Work and Pensions Secretary Esther McVey’s decision to ditch a policy of refusing to reimburse missed payments dating back before October 2014.

The DWP estimates that the average back payment to each claimant owed money will be £5,000 although the average paid back so far is £7,000. In a written statement to MPs, welfare minister Sarah Newton said it was looking into 570,000 cases, with the majority of the first 320,000 announced in December expected to be finished by April.

A second wave of 250,000, announced in July, will be worked on through 2019. Some

‘People were short-changed’

£120million has already been paid out. She said: ‘We now have a team of over 400 staff working through these cases, with a further 400 due to join the team through October and November, and will be assigning more staff to review the additional 250,000 cases. This will enable us to com- plete this important activity at pace.’ A DWP spokesman added: ‘We have worked with charities and other disability organisations to make sure that we are providing the right support to all affected claimants and are hiring and allocating more staff to do that.’

Marsha de Cordova, shadow minister for disabled people, said: ‘Disabled people have been short- changed and denied the social security they were entitled to. This mess is another example of how the Conservatives have created a hostile environment for sick and disabled people.

‘ The Government must ensure that disabled people who have been so unfairly treated are properly compensated. A Government that forces disabled people into debt and even makes some destitute is a disgrace.’

Yesterday, the Government defeated a bid to force the publication of its analysis of the impact of its flagship welfare reforms on people’s incomes.

Labour described Universal Credit as a ‘vehicle for cuts’ but failed to push ministers into releasing the documents by 299 votes to 279. The party’s work and pensions spokesman Margaret Greenwood said UC had been ‘beset with flaws in its design and delivery’ and was ‘causing immense hardship’.

But Miss McVey insisted the Government had taken a ‘mature approach’ to the rollout, saying it would continue.