Employment and Support Allowance Underpayments Debate

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Department: Department for Work and Pensions

Employment and Support Allowance Underpayments

Marsha De Cordova Excerpts
Thursday 18th October 2018

(5 years, 5 months ago)

Commons Chamber
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Urgent Questions are proposed each morning by backbench MPs, and up to two may be selected each day by the Speaker. Chosen Urgent Questions are announced 30 minutes before Parliament sits each day.

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Marsha De Cordova Portrait Marsha De Cordova (Battersea) (Lab)
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(Urgent Question): To ask the Secretary of State for Work and Pensions if she will make a statement on the updated figures on the employment and support allowance underpayments.

Sarah Newton Portrait The Minister for Disabled People, Health and Work (Sarah Newton)
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The Department is correcting some historical underpayments of ESA that arose while migrating people from incapacity benefit to employment and support allowance. We realise how important it is to get this matter fixed. The mistakes clearly should not have happened and it is vital that the situation is sorted as quickly as possible.

For the initial stage of the exercise, we expect to review around 320,000 cases, of which around 105,000 are likely to be due arrears. We now have a team of more than 400 staff working through these cases and have paid around £120 million of arrears. We expect to complete the vast majority of this part of the exercise by April 2019, and we have to date completed all cases where an individual is terminally ill and has responded to the review, thereby ensuring that they receive due priority. The additional cases will be undertaken throughout the course of 2019.

The announcement in July to pay cases back to the point of conversion requires us to review an additional 250,000 cases, of which we estimate around 75,000 could be due arrears. We will undertake this work throughout the course of 2019. An additional 400 members of staff will be joining the team throughout this month and November, and we will be assigning further staff throughout the review of the 250,000 cases. That will enable us to complete this very important activity at pace.

The Department has prioritised checking the claims of individuals who, from our systems, we know to be terminally ill. To date, we have completed all cases from the initial 320,000. Where an individual is terminally ill and has responded to the review, we want to ensure that they get that money as soon as possible. We are therefore now contacting cases identified as most likely to be have been underpaid according to our systems. Some of those cases will undoubtedly be the most complex ones.

The Department yesterday published an ad hoc statistical publication, setting out further detail on the progress we have made in processing cases, and revised estimates of the impacts of the exercise, including details on the number of claimants due arrears and the amounts likely to be paid. Yesterday, I also updated the frequently asked questions guide and deposited it in the Library, and I will continue to update the House.

Marsha De Cordova Portrait Marsha De Cordova
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I thank Mr Speaker for granting this urgent question.

Yesterday, it emerged that up to 180,000 ill and disabled people have been underpaid vital social security dating back to 2011. In July this year, the Government initially estimated that 70,000 ill and disabled people were underpaid, but it is now clear that more than double that amount were underpaid £5,000 on average, after having been wrongly migrated from incapacity benefit to contributions-based ESA, thereby denying them the additional social security support payments such as the severe disability premium. It has taken the Government six years to acknowledge these mistakes and seven years to find out how many disabled people have actually been affected. Some disabled people will wait 10 years to receive back payments.

The Department for Work and Pensions now estimates that it will pay up to £1 billion as a result of this shambolic error, so will the Minister tell us what mechanisms the Department has in place to ensure that the timeline for repayment is followed? Will she ensure that she will keep this House updated? Will her Department pay compensation to those who have been pushed into rent arrears, debt and destitution? What support will the Department provide to the estates of the ill and disabled people who have tragically passed away before receiving their back payment? How much of the Government’s total expenditure on social security is spent on underpayments, and what actions are the Government taking to put this right? Given the scale of the error made transferring people to ESA, how can the Government ensure that they will get it right when transferring up to 1 million disabled people on to universal credit? Perhaps the most important question is this: will the Minister apologise to the almost 200,000 disabled people and their families who have been denied vital social security support?

Sarah Newton Portrait Sarah Newton
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We first came to the House to talk about this issue last December, and we have regularly updated the House since. I myself have already apologised. Clearly, this was a dreadful administrative error in the Department and should not have happened. The permanent secretary has also apologised to the Public Accounts Committee and the National Audit Office for the administrative mistakes.

It is important to recognise that, when people were transferring across from IB to ESA, a very paternalistic approach was taken, meaning the claimant was not involved in the transfer at all. All the funding they were receiving from the Department was transferred across, so nobody had anything taken away from them; rather, people missed the opportunity to receive additional support by way of an additional premium. We are now making sure, by reviewing these cases, that people get everything they are entitled to, because it is important that our benefits system benefits those who are entitled to it.

The hon. Lady raises important questions about what we have learned. We have learned a great deal from this exercise. As we have regularly told the House and Select Committees—the permanent secretary was before the Work and Pensions Select Committee only yesterday answering questions—the culture and mechanisms in the Department for spotting errors have been fundamentally reviewed. As we have discussed at length—this is a matter of public record—people in the Department and stakeholders came forward and pointed out some of the problems with the migration, but the Department responded in the belief that they were a series of one-off errors.

By 2014, it was recognised that some people were not being migrated accurately, and guidance was put in place. These were administrative errors that occurred in the Department, and officials took the appropriate action to the best of their ability. In fact, it was thanks to the good housekeeping of the DWP that the scale of the error was spotted. It was during the routine work undertaken on fraud and error that it was detected. At that point, Ministers were told, and they then undertook the administrative exercises that have led to the situation today.

As the Minister responsible now, I am looking towards the next huge migration of people—from ESA to universal credit—and the Secretary of State has made it absolutely clear that we will take an extremely careful test-and-learn approach and make sure that this time we involve the claimant in the migration. That is how we will avoid the situation reoccurring.