McVey’s U-turn means DWP will pay at least £100 million more to disabled claimants

Disabled people will be paid more than £100 million extra in backdated benefits owed by the government, after a U-turn by work and pensions secretary Esther McVey on the eve of a court hearing.

The Department for Work and Pensions (DWP) had previously only agreed to offer a partial backpayment to an estimated 70,000 disabled people who for years did not receive the correct level of out-of-work disability benefits.

The underpayments were caused by the botched migration of former claimants of incapacity benefit and other benefits to the new employment and support allowance (ESA) from 2011 onwards.

The department failed to realise that many of the claimants were entitled to income-related ESA – and therefore to associated disability premiums – rather than just the contributory form of ESA.

Although DWP had previously agreed to pay back as much as £340 million to those affected – with average payments likely to be about £5,000 – it had said it would only backdate arrears to 21 October 2014, the point at which the upper tribunal ruled that DWP should have assessed claimants for both income-related and contribution-based ESA when deciding their entitlement.

DWP had been refusing to pay back another £100 million to £150 million in arrears that dated from before 21 October 2014.

But yesterday (Wednesday), McVey (pictured) announced that claimants would receive arrears backdated to the date they moved onto ESA, with some claimants now likely to receive up to £10,000 more in arrears.

It is just one in a series of major errors by DWP senior civil servants relating to disability benefits, with the department now believed to be carrying out six separate trawls through the records of disabled people unfairly deprived of benefits.

In a written statement to MPs, McVey said that individuals contacted about their backpayments could expect to receive the “appropriate payment” within 12 weeks after the “relevant information” has been gathered.

Those who have already received arrears payments from 21 October 2014 will have their cases looked at again, with additional arrears paid dating back to the date they were moved onto ESA.

The announcement came as DWP was about to face a court hearing in a judicial review case taken by the Child Poverty Action Group on behalf of a claimant who was underpaid from 2012.

Meg Hillier, chair of the Commons public accounts committee, welcomed McVey’s announcement, which came hours after a report by her committee had attacked DWP’s “culture of indifference”, which saw it take six years to start to address its ESA error.

She said: “I was appalled by the department’s apparent indifference to correcting its mistakes.

“Today’s statement, coming so soon after publication of our report, indicates DWP finally intends to treat this problem with the seriousness it deserves.”

Hillier had said earlier, in publishing her committee’s report, that DWP “simply didn’t listen to what claimants, experts, support organisations and its own staff were saying.

“Its sluggishness in correcting underpayments, years after it accepted responsibility for the error, points to weaknesses at the highest levels of management.

“Indifference has no place in the delivery of vital public services. It must be rooted out wherever it is found.”

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