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Employment and Support Allowance

Volume 792: debated on Thursday 19 July 2018


My Lords, by leave of the House, I shall repeat as a Statement an Answer given to an Urgent Question in another place by my honourable friend the Minister for Disabled People, Health and Work. The Statement is as follows:

“Mr Speaker, in 2017 my department identified an error that had resulted in some claimants being underpaid employment and support allowance between 2011 and 2014 while their claim was being converted from incapacity benefit, a legacy disability payment. The department proactively informed the House of this problem in December 2017 through a Written Statement before briefing the media.

On 15 March this year, I tabled a Statement setting out how this work to correct the underpayments was progressing. I explained that the department would supply 400 staff for this exercise to ensure that we identified as quickly as possible any cases where underpayment had occurred.

Yesterday, I tabled a further Statement to confirm that this work is now under way. Staff are reviewing cases, contacting claimants and making payments; so far, we have paid out more than £40 million in arrears.

As outlined in yesterday’s Statement, the department has analysed the relationship between “official error” and Section 27 of the Social Security Act 1998 in regulating how and to what point in time arrears can be paid out. As a result of this analysis, we will now pay arrears to those affected back to their date of conversion to ESA. Where we have already corrected cases by paying backdated arrears up to 21 October 2014, we will review these cases again and pay any additional arrears that are due prior to that date.

As planned, my department will be contacting all those we have identified as potentially affected. Once an individual is contacted and the relevant information gathered, they can expect to receive any backdated payments within 12 weeks. Once contacted, individuals are provided with a dedicated free phone line on which they can contact the department to discuss their claim”.

My Lords, I thank the Minister for repeating that Answer—another day, another DWP mistake. Back in 2011, 70,000 sick and disabled people were underpaid thousands of pounds after they had been migrated from incapacity benefit to contributory-based employment support allowance, without the possibility being recognised that they had paid enough stamps to entitle them to non-contributory ESA. The result was to deny them access to additional premia that they might have been able to get had the Government done that correctly.

The error here is that the Government have now accepted their mistake but have decided that people’s payments could be backdated only to 2014, because in 2014 a tribunal judgment made it clear that the Government had been doing this the wrong way. Yet again, therefore, it took a small charity to go to court to judicially review the department. And yet again, at the very last minute the DWP caves in and says, “Fair enough, we will now backdate payments to 2011”.

This raises a couple of questions. The scale is enormous: the National Audit Office said that the decision not to go back before October 2014 would have resulted in that group of disabled claimants losing out to the tune of between £100 million and £150 million. Individuals might be entitled to up to £10,000 of wrongly underpaid benefits.

There is a pattern to this. Six reviews are in progress to identify disabled people who may be entitled to back-payments, five as a result of legal cases against the Government. I therefore have two questions for the Government. First, why did it yet again take a tiny charity—the CPAG, to which I pay tribute—to use money donated to it to go to court to get Ministers to do the right thing? Secondly, there is the systemic issue: the PAC, in its report on ESA, and the NAO, in its report on universal credit, described a department that was defensive when dealing with outside organisations, and unwilling to listen to warnings about problems that were occurring. What steps, therefore, is the Minister’s department taking to make sure that in future it listens to warnings—from inside and outside—and does not wait until someone takes it to court?

I thank the noble Baroness for her response. I turn straightaway to her point about restricting—as it were—the payments. Initially the department believed that we were legally restricted to calculating repayments from 2014 due to a statutory rule—Section 27 of the Social Security Act 1998—which governs the position with regard to payment of arrears when a court of tribunal finds that the department has made an error of law. Following a thorough investigation, however, we realised that this interpretation was incorrect. We have made this very clear in previous Statements to the House and we have made it clear that we have been working extremely hard to do everything we can to correct a mistake that should never have been made in the first place. We believed, however, that the law prevented our paying benefit back to the date of conversion. We now understand that we can do that. We have listened to a range of opinions, including those of the CPAG, undertaken a thorough investigation of the legal position and realised that the law that dictated that we could not do this in the first place was wrong.

We want to be sure, therefore, that we pay back everything that is owed. I would add that the staff have been working extremely hard to put this right and to help everybody who may have lost out from these payments since the whole process of migrating people from incapacity benefit to ESA began in 2008.

My Lords, is the Minister satisfied that the reduction in the departmental expenditure limit that the DWP has experienced over the past five to 10 years has not contributed to this error? She has just said that the DWP is now putting 400 staff on the case. I have a serious concern about the extent to which staff shortages are occasioning these massive administrative blunders that cause not just inconvenience but serious financial difficulty to large numbers of the population. Can she confirm that passported benefits will also be paid by way of compensation, because some of the people who have been left out in these underpayments have also lost out on free dentistry, NHS treatment, travel and free school meals, to the extent that it would accumulate to large sums of money each year, in addition to not getting the benefits to which they are entitled?

My Lords, let me make it clear that we do not believe that this is attributable to staff reductions at the Department for Work and Pensions. We still have over 70,000 employees. We have also been working hard to do more since 2010. Since this Government came to power, we have spent £5.4 billion a year more than we were doing in 2010 to support people with disabilities. We continue to do so while upping our game and, yes, demanding more from our employees, who are working extremely hard. That is to ensure that we have the proper resource and the staff to make sure that we can review all these cases at pace. We have already started making payments—over £40 million in arrears so far—so we are doing everything we can to ensure that people get the support they are entitled to and at pace.

Based on my meetings with the Minister of State for Disability and our Permanent Secretary, who made a robust case for delivery by our department in front of the Public Accounts Committee last week, I can say that the department is working hard. Yes, we are doing more, so noble Lords could say we are a little stretched, but we are proud of what we are doing and delivering. We want to get this right. On passporting benefits over to UC, we are making sure that people will not lose out in what they are entitled to.

My Lords, in the part of Gwent where I was born, the letters “dwp” form a word. It is pronounced “dup” and means stupid or daft. Could that account for why the accounting officer at the Department for Work and Pensions says that he does not understand all the letters that his office sends to claimants? If the author of the letters does not understand them, how on earth are the claimants supposed to do so?

My Lords, I hear noble Lords laughing but this is no laughing matter. I take great exception to the suggestion that I am working for anything that could be described as a dump. I am the lead Minister for the correspondence that goes out to claimants and we work through that correspondence with a fine-toothed comb to make sure it is in clear English, polite, responsive and on time. Since I have been in office, we have been at 100% in terms of our timing. We are doing everything we can to support so many people, particularly those with disabilities and health conditions, to improve and transform their lives. I therefore will not listen to the noble Lord talking about—

My Lords, no, somebody in the department may have said something but, as far as I am concerned, I am proud to work for the Department for Work and Pensions.

My Lords, I am sure that most of the House accepts what the Minister says: the department is working extremely hard and trying very hard to get these things right. I do not think that is in doubt, but is it not also the case that each of these underpayments affects the quality of life of a very vulnerable person? Sometimes that degree of distress undermines their quality of life. Can the Minister continue to do all she can to ensure we all recognise that at the end of this process is somebody who will be much damaged by underpayments of this kind?

My Lords, I thank the noble Lord for his question, which gives me an opportunity to say that my honourable friend in another place, the Minister of State for Disabled People, Health and Work, is working tirelessly not only to do the job but to do so in an exemplary fashion. She absolutely understands that each individual life is affected when we get it wrong—where there is a mistake. As she said in another place only an hour ago, one mistake is one too many. But the reality is that we are working hard and we have wonderful staff who are very proud of what they do.

I am a little afraid of saying this in case it is misunderstood but, on underpayments, I should be clear that no one suffered a cash loss. We did not take any money away. That does not excuse the mistake that was made. The reality is that we needed to ensure that underpayments from the transfer were corrected as quickly as possible, and we continue to do so.