Underpayment of Benefits: Compensation

Jonathan Ashworth Excerpts

Thursday 13th January 2022 Commons Chamber

[Jonathan Ashworth (Leicester South) (Lab/Co-op)]

(Urgent Question): To ask the Secretary of State for Work and Pensions if she will make a statement on the historic underpayment of benefits to 118,000 benefit claimants and the Government’s plans for compensation.

[The Parliamentary Under-Secretary of State for Work and Pensions (David Rutley)]

I would like to start by extending an apology to Ms U for the experiences that have been highlighted in the Parliamentary and Health Service Ombudsman’s report. The Department will, of course, formally apologise and make additional payments now that that the PHSO report has been published.

I should remind the House that the employment support allowance was introduced in 2008, and from March 2011 the Department began reassessing people in incapacity benefits for eligibility for ESA, which saw some claimants underpaid. The Department’s priority was that all people get the financial support to which they are entitled. It undertook a special exercise to review all cases that were potentially affected and paid arrears where due. We realised how important it was to get this matter fixed and ensure that people get the benefits that they are owed as quickly as possible. We therefore set up a dedicated team, with up to 1,200 staff at the peak of the workload. This has enabled us to complete this important work at pace.

I remind the House that the exercise to correct past ESA payments and pay arrears, following conversion from the previous incapacity benefits, was completed last year, and the then Minister for Disabled People, Health and Work, my hon. Friend the Member for North Swindon (Justin Tomlinson), made a statement to the House in July 2021. All cases have been considered and reviews completed, where the information has been provided, and arrears due were paid. As of 1 June 2021, we have reviewed approximately 600,000 cases and made 118,000 arrears payments to those who are eligible, totalling £613 million. The Department published an update on the exercise last Thursday on gov.uk, which sets out further detail on the progress that it has made on processing the cases.

[Jonathan Ashworth]

May I start by paying tribute to the Greenwich Welfare Rights Service and to my hon. Friend the Member for Eltham (Clive Efford)? It is a reminder of the value and the vital importance of welfare rights advisers, who do so much for our constituents despite grappling with swingeing cuts under the last 10 years of Conservative Government.

The report came about because a vulnerable person with significant long-term health needs, recovering from a heart bypass, was forced to endure years of hardship, trying to live on less than 50% of what she was entitled to, for a sustained period because of mistakes made by the Department for Work and Pensions when it migrated 100,000 claimants from incapacity benefit to contribution-based employment and support allowance between 2011 and 2014. The ombudsman’s report today not only vindicates Greenwich Welfare Rights and hon. Members who pursued the case, but is damning for the Government.

The DWP’s incompetence and failure to provide compensation has been judged as maladministration. Does the Minister accept that, as a consequence of the Department’s incompetence, more than 100,000 people were unable to access passported benefits and extra support such as free prescriptions, despite being highly vulnerable and often having long-term health needs?

The ombudsman rules that refusal to offer recompense for that was inconsistent with the Department’s own principles of remedy. With respect, and although I welcome the apology, it is no good Ministers’ putting their fingers in their ears and pretending that there is not a bigger problem here. This stands as—in the words of this report—“an unremedied injustice”, impacting on some of the most vulnerable people in society.

Will Ministers remedy that injustice via compensation for those affected, as the ombudsman and the Department’s own principles recommend, or will the Minister deny compensation to 118,000 disabled people and people with long-term health conditions who lost out through no fault of their own? Frankly, when disabled people face a cost-of-living crisis with rising heating bills, when 600,000 disabled people are struggling with a universal credit cut, and when disabled people face their support being cut this April because inflation is heading to 6%, does this sorry saga of maladministration not prove once again that disabled people are worse off under this Government?

[David Rutley]

I agree absolutely with the right hon. Gentleman’s comments about welfare advisers. They play a vital role, whether in Greenwich or in Macclesfield, where we have the Disability Information Bureau, and provide the extra support that people in very vulnerable circumstances often need. He highlighted the situation involving Ms U; as I said in my apology, it was very concerning, and those compensation payments will be paid, as I have reassured him.

On the point about broader compensation, of course we only received the report this morning—it has only just been published—so we will consider it and review its recommendations, as is entirely right. We would also say that if people believe they should have further compensation and want to contact us at DWP, they can contact us through the various helplines that have been set up. There is a team working specifically on this broad issue, and if they prefer, they can go through the complaints process, so those avenues are available to those individuals. In these situations we are typically not compelled to come forward with compensation payments, but we will consider the wider points and the views put forward by the report.