DWP pays HALF A BILLION to dead people – while underpaying pensions & cutting benefits

The Department for Work and Pensions (DWP) has mistakenly paid £512 million in state pension and pension credits to deceased individuals over the past five years. It comes as the department cut chronically ill and disabled people’s benefits repeatedly.

DWP: half a billion to dead people

As the Telegraph reported, the DWP has paid nearly half a billion pounds to dead claimants since 2019. This issue arises when the DWP isn’t promptly informed of a pensioner’s death, leading to continued payments. In such cases, families are not required to return the overpaid amounts.

The DWP relies on relatives to report deaths, but delays can occur especially when families are grieving. Additionally, the DWP receives death notifications from the General Register Office, but this process can be slow.

Yet over the same five-year period, the DWP has also underpaid £209 million in state pensions. These underpayments often result from complex pension rules and administrative errors. At the same, the new Labour Party government has also cut the winter fuel payment – plunging potentially hundreds of thousands of older people into poverty.

As the Telegraph noted of the £512m overpayments:

Less than half has since been recovered as there is no legal obligation for families to return the money.

The £257m lost could have covered winter fuel payments for up to 1.3 million pensioners.

However, perhaps more pertinently, the department has cut benefits to the bone in the same time – throwing hundreds of thousands of people into poverty.

Half a decade of misery

Since 2019 (and long before too), the DWP has been at the center of criticism for the significant real-terms cuts to social security that have adversely affected millions of households.

Despite the government’s rhetoric about supporting the most vulnerable, successive policies and a lack of adequate uprating of benefits have left low-income families, disabled people, and unemployed individuals struggling to meet basic living costs.

According to a recent analysis by the Resolution Foundation, in 2022 alone benefits rose by just 3.1%, while inflation peaked at over 10%, leaving recipients effectively 7% worse off. For households reliant on Universal Credit, this has translated into a significant reduction in purchasing power for essentials such as food, energy, and housing.

One of the most striking examples of the DWP’s failure to protect vulnerable groups is the treatment of the £20-a-week uplift to Universal Credit introduced during the pandemic.

While this temporary measure provided much-needed relief for millions, it was withdrawn in October 2021 despite widespread warnings about the detrimental impact its removal would have.

The Joseph Rowntree Foundation estimated that the cut pushed 500,000 more people into poverty, including 200,000 children. The DWP’s decision to prioritise budget savings over social wellbeing has been condemned as short-sighted and harmful.

Meanwhile, other structural issues within the social security system have compounded the problem.

Structural abuse from the DWP

The benefit cap, which limits the total amount of support a household can receive, has not been adjusted since 2016.

As a result, it has become increasingly punitive as inflation has eroded its value.

The Child Poverty Action Group estimates that 123,000 households, including over 300,000 children, are affected by the cap, with many families unable to afford adequate housing or nutritious food.

Similarly, the two-child limit on claiming child tax credits or Universal Credit continues to deepen child poverty, with the Resolution Foundation reporting that it affects around one million children. The Labour government refused to reverse the Tory policy.

The DWP has defended its approach, arguing that the social security system must balance providing support with incentivising work. However, critics argue that this rationale is both misleading and harmful.

The assumption that poverty is a result of insufficient motivation to work ignores the complex realities faced by many low-income families, including the prevalence of in-work poverty.

The Resolution Foundation found that more than half of all households in poverty have at least one adult in employment, highlighting the inadequacy of wages and the rising cost of living as primary drivers of financial hardship.

The government’s reliance on punitive measures, such as benefit sanctions, has further undermined the social security system. Sanctions, which involve withholding payments from claimants deemed to have failed to meet certain conditions, have been criticised as counterproductive and damaging.

A study by the University of York found that sanctions disproportionately target vulnerable groups, including disabled people and single parents, and often lead to increased debt, food insecurity, and mental health problems rather than improved employment outcomes.

A lost five years while the government throws money away

The cumulative impact of these policies has been stark.

The Trussell Trust, which operates a network of food banks across the UK, reported a record increase in demand in 2023, with over three million emergency food parcels distributed. This figure underscores the growing number of households unable to afford basic necessities, a situation directly linked to the inadequacy of social security.

The DWP’s handling of social security since 2019 has also raised questions about accountability and transparency. Reports of delays, administrative errors, and poor communication have eroded public trust in the system. For instance, the rollout of Universal Credit has been plagued by criticism for its complexity and the five-week wait for the first payment, which often plunges claimants into debt.

So, the errors with DWP payments to dead claimants have financial implications for the public and highlight the challenges in managing the state pension system. However, they also show that the department and successive governments are catastrophically mismanaging our money – while throwing countless people into poverty unnecessarily.

Featured image via the Canary