Benefits overpaid by £3.7bn, says financial watchdog

ANNUAL benefit overpayments soared to a record £3.7 billion, according to new estimates by financial watchdogs.

The National Audit Office (NAO) said overpayments, excluding state pensions, had climbed to an estimated 4.4 per cent of related benefit spend from 4.1 per cent in 2016-17.

Meanwhile estimated rates of fraud and error overpayments also increased across all continuously measured benefits, the report stated. Untimely or inaccurate reporting of incomes and earnings is responsible for £1.2billion of the overpayments due to fraud or error, according to the study. Universal Credit has the highest estimated level of overpayments, at 7.2 per cent.

Yesterday MPS criticised the errors being made as it also emerged that underpayments had reached their highest level.

Frank Field, chairman of the Commons work and pensions committee, said: “It’s like a pinball machine, the payments system – you might get an overpayment, you might get an underpayment. Lots of people are not being paid Universal Credit when they should be, causing hardship, and the same department is overpaying others – what is going on?”

Underpayments soared to their highest amount ever at £1.7 billion, or one per cent of total expenditure on benefits. Personal Independence Payment made up the biggest amount of underpayments at 3.7 per cent.

The Government estimates that £115 million of the £300 million increase in overpayments relates to changes in the maximum time that a person claiming pension credit or housing benefit can spend abroad, which has been reduced from 13 weeks to four weeks, the study said.

The DWP’S total expenditure on benefits in 2017-18 was £177.5 billion, of which £155.1 billion was for benefits paid directly by the Government, and £22.4 billion was for housing benefit paid on its behalf by local authorities.