DWP blunder sees claimants told their benefit overpayment debt has been written off

The Department for Work and Pensions (DWP) has had to send out a panicked message to staff after its IT system mistakenly ordered benefit overpayments owed by thousands of claimants to the government to be written off.

Last month, following a COVID-related suspension, DWP told staff they could again begin bids to reclaim overpayments of benefits – whether through DWP or claimant error, or fraud – from disabled and non-disabled claimants.

The blunder appears to involve claimants who have been overpaid new style employment and support allowance (ESA) and new style jobseeker’s allowance (JSA)*, but it could possibly also involve universal credit.

The process of recovering benefit overpayments had been on hold since April because of the coronavirus pandemic, partly to allow debt recovery staff to be redeployed to frontline roles.

The process of recovering overpayments resumed in July, although apparently only since late last month has DWP been able to make new referrals through its IT system for overpayments to be recovered from claimants of new style ESA and JSA.

But late last week, every member of staff in DWP’s working age benefits section received a panicked internal email telling them they needed to “urgently pause” further referrals for overpayments of “new style” benefits.

The email said this was because “recoverable overpayments” were being “incorrectly scheduled for write-off rather than being referred through to debt management for recovery”.

The email also said it was not known when the problem would be fixed, although “digital colleagues” were looking at the issue “as a priority”.

It is not clear yet how many people have been affected, and what will happen to those mistakenly told their DWP debt has been wiped.

DWP declined to answer a series of questions about the blunder from Disability News Service (DNS) this week.

DNS had asked whether the repayments related solely to those who had been overpaid new style ESA and new style JSA.

But a DWP spokesperson suggested that it could also apply to some overpayments of universal credit.

He said: “Overpayments of Universal Credit, new-style JSA and new-style ESA that are in excess of entitlement are recoverable.”

But he declined to say how many claimants had mistakenly been told their overpayments had been written off; whether these overpayments would now be reinstated; and how much the department had mistakenly written off.

DWP has also made clear that any overpayments above a claimant’s benefit entitlement are recoverable by the department, even when the claimant was not at fault.

*New style ESA and new style JSA are contributory benefits for those credited with sufficient national insurance contributions, and they can be claimed on their own or at the same time as universal credit

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