Employment and Support Allowance: Underpayments

Marsha De Cordova Excerpts

Monday 25th February 2019 Commons Chamber

[Marsha De Cordova (Battersea) (Lab) (Urgent Question)]

To ask the Secretary of State for Work and Pensions if she will make a statement on the employment and support allowance underpayments.

[The Minister for Disabled People, Health and Work (Sarah Newton)]

The Department is correcting some past underpayments of ESA that arose when people moved from incapacity benefit on to ESA. We realise how important it is to get this matter fixed. Clearly, the mistakes should never have happened, but we know that it is vital that it is sorted as quickly as possible. Last Thursday, I tabled a written statement that updated the House on progress since the previous written statement in October last year. We are on track to complete work on the majority of the original 320,000 cases by the end of April this year. As of 11 February, 310,000 of that overall number have started the reassessment journey. We have paid arrears of over £328 million to 58,000 people, which is significant progress. The Department has also increased the number of staff working on putting these cases right from about 400 staff to approximately 1,200 staff, which will enable us to continue to complete this important activity at pace.

Following the announcement in July last year to pay cases back to the point of conversion, I confirmed in October that this will require us to review an additional 250,000 cases. We have started this activity and will aim to complete this phase by the end of the year. Last Thursday, the Department published an ad hoc statistical publication on gov.uk that sets out further detail on the progress it has made on processing the cases, including an updated estimate on forecast expenditure and the number of people affected. The Department now estimates that about 600,000 cases require review and that by the end of the exercise about 210,000 arrears payments will have been made. The increase, compared with the previous estimate of 180,000, is based on additional sampling and very careful, thorough checking. Alongside the written statement that was published last Thursday, I also published an updated version of the frequently asked questions, and this has been deposited in the House Library.

[Marsha De Cordova]

Thank you for granting this urgent question, Mr Speaker.

On 21 February, the Department for Work and Pensions published a statement saying that 210,000 ill and disabled people could have been underpaid vital employment and support allowance after a grave error by the Department dating back to 2011, when it wrongly migrated them from incapacity benefit on to contributions-based ESA, denying them essential social security, such as the severe disability premium, to which income-based ESA would have entitled them.

The Government initially estimated that 70,000 ill and disabled people were underpaid. In October 2018 that number increased to 180,000 people, and now it has emerged that up to 210,000 ill and disabled people were underpaid, on average, £6,000 in social security. How can we trust that the number will not increase?

Thus far, 20,000 people have died before receiving the social security to which they were entitled. That is 20,000 people who will never be repaid what they were owed by the DWP. The Department estimates that more than £1 billion will be spent to rectify this catastrophic error, and we have now learned that it will employ up to 1,200 staff to do so.

How many people have been pushed into rent arrears, council tax arrears, debt and destitution? Will the Department listen to Labour’s demands and pay compensation to those who have been pushed into debt? What support will the Department provide to the estates of the 20,000 ill and disabled people who tragically died before they received their payment?

Given the scale of the issue in transferring to ESA, how will the Government avoid repeating this error when they transfer ill and disabled people from legacy social security on to universal credit? Given that there are currently seven reviews into ill and disabled people being underpaid, how much of the Government’s total expenditure is spent on underpayments? Finally, will the Minister apologise to the additional 30,000 disabled people, and their families, who have been denied thousands of pounds in social security, and to the 20,000 people who died before justice was done?

[Sarah Newton]

I thank the hon. Lady for her questions. Let me make it absolutely clear that, each and every time I have addressed the House, I have thoroughly apologised on behalf of the Department for these administrative errors. This should never have happened, and I am very happy to apologise again today. Although I wish this had never happened, we are working at pace to make sure that people receive the payments to which they are entitled.

The hon. Lady is right to say that we have reviewed the cases of people who have subsequently deceased, but she is not right about the quantities of people who would have actually benefited from this exercise. We are only part of the way through, and we do not know, as yet, the total number of deceased people who, having reviewed their case, would have been eligible for additional payments. Where we review the cases of deceased people—of course, we are reviewing all of the cases—we make the payments to their family. We are working carefully and urgently to find the families so that we can make the payments.

On the additional resources that we have made available to complete this exercise, I am sure the whole House would agree it is vital that we get on and sort this out as swiftly as possible so that people can benefit from the additional sums of ESA and other disability premiums to which they might be entitled. I am pleased that we have been able to find the additional resources to enable us to do this. I made the commitment to the House that we would complete the exercise this year, and that is what we are going to do.

The hon. Lady rightly asks what lessons we are learning, especially as we are now planning for the managed migration of people from ESA on to UC. The key lesson we have learned is to make sure that the claimant is involved in that decision. For all the right reasons I am sure, it was decided to migrate people from incapacity benefit on to ESA without contacting them—just passporting them over. I have heard Opposition Members make that call to me as we approach the managed migration, and that is the key mistake that was made. The opportunity was missed to check in with people claiming the benefit to make sure that their circumstances had not changed and that there were not additional payments to which they might be entitled, and that was the cause of this particular problem. I am determined that those lessons are learned so that, as we do the managed migration in a measured and careful way, the mistake is not made again.