DWP told to stop forcibly taking cash from benefit claimants to pay for its own mistakes

A coalition of more than 30 organisations has written to minister Liz Kendall demanding the Department for Work and Pensions (DWP) stops forcibly recovering debts from hundreds of thousands of benefit claimants caused by its own mistakes.

Freedom of Information data sourced by Public Law Project, the law firm that organised the letter, show that in 2023/2024, 686,756 new “official error” universal credit overpayment debts – which are incurred when a claimant is paid too much benefit due to mistakes by the DWP – were entered on the department’s Debt Manager system.

The DWP is then able to recover these “overpaid” benefits – sometimes to the value of tens of thousands of pounds – by cutting the claimant’s future universal credit by up to a quarter of the basic payment, known as the ‘standard allowance’.

• ‘I have nothing’: DWP takes millions from benefit claimants every year to pay for its own mistakes
• DWP mistakenly accuses disabled woman of owing £28,000 in benefit overpayments

In one case mentioned in the letter, the state pension-age member of a mixed-age couple, who cares for his disabled son and has a partner with no recourse to public funds, was repeatedly and wrongly advised to claim universal credit by DWP officials. The DWP later noticed their mistake and stopped his claim, resulting in an overpayment debt of more than £38,000.

“No one is expecting the DWP not to make mistakes,” said Shameem Ahmad, chief executive of the Public Law Project. “However, it is incumbent on the department to take responsibility for those mistakes, rather than pushing that burden onto people it should in fact be supporting.

“These official payment errors have real and highly detrimental consequences for people – causing sudden financial pressures and anxieties, through no fault of their own.

“This is the government’s chance to ensure it does not plunge hundreds of thousands of more people into debt, go some way in restoring public trust, and ultimately incentivise the DWP to not make errors in the first place.”

One of Public Law Project’s clients was overpaid universal credit due to the DWP failing to take into account his university grant and then wrongly treating it as a loan. This was despite him having declared this information and repeatedly provided the relevant documentation.

The second overpayment was identified when he contacted the DWP after hearing other students had had similar difficulties. Following intervention by lawyers, the DWP agreed to waive recovery of £10,480.50 in overpayments.

“The fact is simple that I did nothing wrong nor illegal,” he told Big Issue. “All I needed was some help at the hardest time of my life. I have no dispute with the £70,000 of student fees I owe the government, as when I’m earning a good wage, I think it’s fair to pay for education. However, six weeks into my studies I was thrown into unnecessary chaos.

“A full mental health breakdown ensued as the DWP backtracked on their word and sent me a whopping bill of £1,478.68. I thought there must be a mistake and that a complaint would easily rectify things, but it took me over three years for the DWP to agree they did not have the power to recover this overpayment.”

Big Issue has previously reported on benefit overpayments and how they can have a “devastating” impact on the lives of vulnerable people. In one case, a disabled woman was mistakenly accused of owing the DWP £28,000 – but after Big Issue contacted the government, she received an apology, backdated pay and the debt was scrapped.

A DWP spokesperson said: “We always work with people who have been overpaid to ensure repayments are affordable. Overpayments by official error account for just 0.3% of our overall benefits spend.

“We have an obligation to protect public funds and to ensure money lost to fraud and error is recovered, which is why we are bringing forward the biggest fraud crackdown in a generation, saving the taxpayer £1.5bn over the next five years.”

The Public Law Project letter – which is co-signed by organisations including Child Poverty Action Group, Mencap and Age UK – calls on the government to amend the Public Authorities (Fraud, Error and Recovery) Bill, which is currently going through parliament, so that recovery action is limited to cases where the claimant could reasonably have been expected to have realised that they had been overpaid.

Green Party MP Siân Berry has tabled an amendment to this end. She said: “The government is fostering blame and suspicion of people in need of social security. The bill creates huge new powers to intrude on people’s lives, force repayments, take money directly from bank accounts, and even punish people by removing their driving licences for money owed to the DWP.

“None of these powers are appropriate for overpayments caused by DWP error. My amendment aims to end the cruel practice of forced repayment of official error which last year affected over half a million people.”

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