The £5 billion pay out to people who shouldn’t have received it


Department for Work and Pensions – £3.5 billion of overpayments detected by auditors


Here is a strange paradox. The government has imposed a tough and to many people unfair benefits and  tax credits regime which has squeezed the poorest – both the unemployed and those in work.

Yet this summer accountants have revealed that HM Revenue and Customs and the Department for Work and Pensions has paid out £5 billion to people on benefits and low incomes who should not have received it. And they predict that even more will receive these payments next year. I have written about this in Tribune magazine this week.

The disclosure comes in the annual audit of both departments by Parliament’s financial watchdog, the National Audit Office, who have qualified the accounts of both departments – as not being a true and accurate description of public spending.

According to the NAO report: “HMRC estimates that the overall level of error and fraud that resulted in overpayments in Tax Credits in 2015-16 increased to 5.5% of Tax Credits expenditure (from 4.8% in 2014-15)

“HMRC estimates that the overall level of error and fraud resulting in underpayments in Tax Credits in 2015-16 remained at 0.7% of Tax Credits expenditure (0.7% in 2014-15). This equates to overpayments of £1.57 billion and underpayments of £210 million.

“HMRC has told us that it believes the level of error and fraud in Tax Credits will increase further when measured for 2016-17. Two main factors have been identified that will lead to this increase: the introduction of the ‘Commercial with a view to a profit’ self-employment test for those who are self-employed and the impact of the Concentrix contract. The impact of these factors on error and fraud levels will not be measured until June 2018, and so the estimate of error and fraud in 2015-16 remains the most up-to-date indication available of error and fraud in Tax Credits expenditure for 2016-17.”

Concentrix were sacked by the department after a privatisation programme went wrong – and they were not up to the job.

Worse are the figures for DWP.

The  NAO’s findings are: “Excluding State Pension, overpayments are at the highest levels since 2009-10, while underpayments are at the highest recorded levels.”

Overpayments amount to £3.4bn, excluding the state pension, an increase of £400 million while underpayments are £1.5bn In percentage terms this amount to an increase to 4.1 per cent of all overpayments and 1.9 per cent of all underpayments.

The report says: “Amongst benefits measured annually for fraud and error, Employment Support Allowance and Housing Benefit overpayments are at the highest recorded levels, and Jobseeker’s Allowance overpayments have returned to the highest levels since 2010-11.

The NAO questions some of the techniques used by the DWP to calculate fraud – saying it assumes that when people don’t get back to the department for a re-assessment that they have been fraudulently claiming. This may not be the case. Also, information is out of date.

“The absence of up-to-date information on error rates in large benefit streams creates a risk that the department is not targeting its fraud and error interventions effectively,” the report says. “For example, Disability Living Allowance, which accounted for £11.5 billion of expenditure in 2016-17, has not been measured for fraud and error since 2004-05.”

All this points to some serious mismanagement by the ministries – which have been squeezed by successive coalition and Tory governments. But it doesn’t mean that those at the top have suffered. I shall return to some interesting findings in their annual reports.

11 thoughts on “The £5 billion pay out to people who shouldn’t have received it

  1. What’s even more egregious is the way they treat people who have been overpaid no matter what the benefit. Tens of thousands discover sometimes years after the overpayment that they are to have between 40 and 60% of benefits removed to repay the ‘Debt’ that’s a week by the way. The first time they know there’s a problem is when their benefits haven’t gone into their bank accounts when they ring to find out why they’re then informed that they have been overpaid. Many are already in trouble financially due to sanctions, delays in assessments etc. I see many people every day close to suicide because they had no idea they’d been overpaid and they are treated like criminals. Sometimes it’s not that they’ve been overpaid but have mistakenly gone over the limit of what they are allowed to have in savings often because they had no idea. I saw one woman who was about to be made homeless because she started a pension and had no idea that the surrender value would be counted as savings as with any kind of insurance. Then although this was a mistake and a financial matter not deliberate fraud she was then reassessed for ESA and lost her benefits they still took back the money. They say you can make arrangements to repay the debt at a level you can afford then make it impossible to arrange it. Phone calls to DWP are premium rate numbers and claimants are often held in a queue for up to an hour or more before being fobbed off. No doubt the DWP call this fraud in their figures.

    Liked by 2 people

      • More people have died in last few years due to govt policies against the most vulnerable than British people died throughout the world in WW2 both civilian and military personnel.

        It is not only the Greatest Murder of the British People by the British Govt in Peacetime history, but also is only surpassed by the Black Plague and WW1.

        The knowledge and lack of knowledge and awareness of press and journalists to this is an utter disgrace.

        I started After Atos and online feedback survey to count and account for disabled going through the govt Atos ESA WCA disability assessments. and also gather and keep data and record what was happening.

        I like many disabled were hacked attacked, had our groups and websites removed from social media and websites removed by Atos going straight to host server, and host server being threatened unless it removed the sites. This was done without direct contact adn communication to the disabled, severe disabled, terminally ill and carers websites. destroying the website and cutting off the vulnerable and disabled and carers from each other.


        IN 1930s/40s you would be writing Nazi propaganda, denying the polgroms and Holocaust camps and excusing and blaming the Jews. Now it is the disabled, benefit claimants and unemployed. and most people in receipt of benefits are in work but work does not pay, zero hours contracts or low wages and less than minimum wage on no contract work means most cannot meet their basic bills.

        This article is an insult and promotes and encourages more discrimination and hate. Disability Hate and Attacks on Disabled gone up by 125%. Attacks on disabled are not a criminal offence and police do not respond, due to social status of victim and it being a disability discrimination and harassment it is categorised under Civil Offence, so no access to justice or protection as even as disabled or even as a disabled child you have to have thousands of pounds to take a case or lawyers say We Don’t Give a Shit, Your Problem, Not Ours.

        YOUR KNOWLEDGE IS ZERO. and overpayments will be in tens of pounds per person, not hundreds or thousands. The tens which make the difference whether you eat, have heating, can pay the Housing Benefit top up, clothe children or afford even baby milk or baby clothes or nappies. Or ability to wash childrens clothes for school next day without hot water and without any detergent..

        Very upsetting this article. You have no idea.

        I started by checking the deaths of disabled due to with drawal of benefits and support and basics, heat, lighting, food, eviction, homelessness, any basic help against the deaths of Jews in Polish Nazi ghettos. I realised it passed that, I then went on and found the deaths surpassed most disasters, diseases, wars plagues in UK except Black Death and WW1.

        and I cannot tell you how many journalists and experimental researchers and graduates use us for their fodder and leave.

        Your article is Boody Disgusting and so are You. Does Not Say It.


      • This article is not an attack on disabled people claiming benefit at all – it is just highlighting figures produced by two ministries on overpayments. It also points out that the figures for the disabled may be inaccurate as they have not been checked for some 12 years. If you check my site for the article on David Gauke you will see I challenged him at Westminster over the number of deaths referring to his ministry as the Department for Corporate Manslaughter. Still given the media always highlighting disabled fraud O can see why you are angry. Last point my wife is disabled and I act as a carer for her.

        Liked by 1 person

      • If you look at the stats you’ll see that the majority of that percentage is overpayments underpayments
        The total rate of overpayments on UC was 7.3 percent, higher than JSA’s 5 percent, but the DWP said the difference was not statistically significant.

        Since UC is still in trials, expenditure was much lower on the benefit, totalling only £477 million for 2015/16, compared with JSA’s £2.4 billion in 2015/16, and as a result the monetary value of overpayments was also lower, at £35 million, compared with £120 million for JSA, the findings reported.

        The fraud overpayment rate was 5.4 percent, compared with 3.1 percent for JSA, a difference the DWP said wasn’t statistically significant.

        Rise in official error
        Underpayments, meanwhile, were estimated at 2.6 percent, higher than JSA’s 0.8 percent, and the DWP said the difference was statistically significant in this case.

        The monetary value of UC’s underpayments was £13m, with the majority being due to official error, the DWP said.

        GOV.UK Logo BIGThe rate of official error underpayments was 2.3 percent, significantly higher than JSA’s 0.7 percent, the DWP said, while the claimant error rate was 0.4 percent, compared with 0.1 percent on JSA.

        The National Audit Office (NAO) said last year that levels of fraud and error in benefit provision were “unacceptably high” and pointed to the need for better management of data.

        The delayed rollout of UC, which is currently undergoing trials in eight UK job centres and relies on an IT system that is still in development, was seen as hindering the DWP’s efforts to improve its record on fraud and error. UC’s rollout is currently not expected to be complete until around 2020.

        ‘Urgent action’ needed
        Following an overhaul of the programme, government watchdog the Major Projects Authority (MPA) found last year that the scheme’s lifetime cost had gone up by 20 percent, to £15.8bn. The MPA said the programme was in need of “urgent action” and warned it was in danger of failure.

        The programme has said it is evaluating whether it will use the government’s Verify identity assurance platform, which is also at the trial stage and is rolling out gradually. Verify, set to officially go live this week following delays, is intended ultimately to replace the Government Gateway, but no timeline has yet been suggested for phasing out the older service.


    • It will be a fairly short Paul. If you notice the one area – and it is the biggest one – that does not have large numbers of under or overpayments are pensions. Now calculating pension entitlement is also complicated – the only key point which differs from other benefits is that circumstances don’t change after pensions are paid.
      I can’t see that if they can get pensions right- why they can’t get other benefits right. My suspicion is that don’t employ enough staff to do the job properly opening them up to mistakes. Possibly unlike pensions they don’t have the will to do so. Pensioners after all vote in huge numbers – benefit claimants might not do to the same degree.
      So I think the answer might be more commitment and more staff to handle the other benefits – and for that matter a more supportive attitude to get people into work rather than assuming all claimants are scroungers. As for disabled people – they seem to have singled out to pass a load of hoops and some very callous decisions have been taken – whipped up by obsession in the media highlighting every single case of fraud and ignoring the plight of the many desperate people who do need help.


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