Last year I reported that the national audit office had qualified the Department for Work and Pensions accounts for the 34th year running because they were inaccurate and it couldn’t balance the books.

Auditor General threatens to refuse to pass pension accounts next year if DWP carries on like this

But this year the DWP has surpassed itself – it is now the 35th year that the DWP has had its accounts qualified.

Benefits overpaid officially fell a little from the pandemic year – £8.2 billion instead of £8.6 billion- but when you strip out the extra cost of living payments – they are much higher than the pre pandemic year of 2019 -£7.8 billion compared to £4.4 billion – a massive increase.

Most of the fall in the amount DWP overpaid benefits related to fraud in Universal Credit. The amount of Universal Credit that DWP overpaid fell from 14.7% (£5.9 billion) of expenditure in 2021-22 to 12.8% (£5.5 billion) in 2022-23. But again compared to the pre pandemic year of 2019 this was a rise.

DWP estimates that Universal Credit claims started after the COVID-19 peak (March to June 2020) were overpaid by 13.1% in 2022.This remains significantly higher than the 9.4% that it overpaid all Universal Credit claims in 2019-20.

The reduction is mainly due to a fall in the level of self employment claimants and the reintroduction of rules designed to prevent self employed claimants understating their income.

On average 33% of Universal Credit claims were incorrect in 2022-23,equivalent to 1.6 million claims. Most of these claims (24% of all Universal Credit claims) were overpaid.

The report says: “Around 40% of overpaid claims were to people with no entitlement to any payment at all, which is equivalent to 10% of all Universal Credit claims. Some of these were marginal cases where small amounts of undeclared income or claimant circumstances (such as attending hospital) made the whole claim invalid. However, some other claims were overpaid as much as £1,800 per month; some were completely fictional; and some related to serious and organised crime.”

Pensioners lost hundreds of millions of pounds in underpayments

The record underpayments of pensions and benefits topped £3.3 billion. A large number were caused by people claiming Personal Independence Payments who had not updated the DWP about their increased medical needs.

But it was pensioners who were cheated by the DWP into not receiving their full pension entitlements that is worrying the National Audit Office.

The report says: “The level of State Pension underpaid by DWP has been trending upward for six years to 0.6% (£670 million) in 2022-23. Most of these underpayments (£580 million) were a result of official error. DWP believes that part of the increase is due to changes in how it measures State Pension error and that its previous estimates may have been understated. This brings the total fraud and error rate for State Pension, including overpayments, to 0.7%.

“I will keep the gross level of incorrect payments in State Pension under review and may have to include State Pension in my regularity qualification in future years if the estimated rate continues to rise.”

There is £1.2 billion owed to 165,000 married pensioners, widows and those over 80- all caused by official errors in the past. It will take until the end of 2024 before everyone is paid.

And now the DWP has discovered another 210,000 pensioners owed up to £1.5 billion because officials did not record their right to paid national insurance contributions while looking after children

The report says; “These issues affect people (mostly women)who received Child Benefit before 2000 and whose National Insurance record was not updated to reflect periods of HRP (Home Responsibilities Protection) they were entitled to. DWP cannot begin to correct cases until HM Revenue & Customs (HMRC), which administers both National Insurance and Child Benefit records, corrects the National Insurance records and notifies DWP.
“HMRC intends to begin work to identify people who may have missing HRP in autumn 2023 and will write to them to invite them to apply for missing periods of HRP to be added to their National Insurance record.”

However it turns out that HMRC have destroyed many of the people’s records.to meet Data Protection laws so it may not be able to find them.

Then there are 10 million people claiming Universal Credit have not been updated properly – a small proportion of these may have also been underpaid their State Pension. HMRC began correcting records in February 2023 and expects this work to be completed by the end of March 2024.

The report adds; “DWP has still to determine how many people have been underpaid and by how much they were underpaid. Of those missing the Universal Credit National Insurance credits, 137,000 have already reached State Pension age.“

Roll call of this year’s DWP top officials and their bonuses and pensions

Meanwhile the DWP continues to pay out bonuses to senior staff. Peter Schofield, the permanent secretary, did not take a bonus this year and his pension payments were half last year’s at £16,000. His full package is £210,000 a year compared with £240,000 the previous year.

Neil Couling, the change director who is responsible for universal credit, got a £5000 bonus and had a £52,000 deduction in his pension pot, in a year when he presided over record fraud over universal credit.

Debbie Alder, director of people, got a £15,000 bonus, and put £59,000 into her pension pot, giving her a package worth £200,000 this year.

Jonathan Mills, responsible fo the Labour policy at the DWP, left in June with a £5000 bonus. He is now director of energy markets and supply at the Department for Energy Security.

Nick Joicey, director general of finance who earned £80,000 for five months is now chief operating officer and second permanent secretary of Defra. He is also the husband of Rachel Reeves, the shadow chancellor.

Simon McKinnon, director general and chief digital officer, who left in April 2023, Got a final year bonus of £15,000 and £62,000 in his pension pot, taking his final package to £240,000. He was responsible for reorganising the DWP’s system to bring it back in house.

Amanda Reynolds, director of service excellence, also got a £15,000 bonus and £61,000 into her pension pot, taking her package to £240,000 for providing what some claimants and pensioners would claim was hardly a first class service.

Katie Faringdon, director general for disability, health and pensions, got no bonus but had a £175,000 package including £44,000 into her pension. Over the last two years she has put pension benefits worth £131,000 into her personal pension fund. I am sure the millions of pensioners facing delayed pensions and still waiting to be reimbursed for mistakes by officials into their pensions will be pleased for her!

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