Vulnerable people should not be punished for DWP welfare errors
4 min read
Nobody expects the DWP to be infallible. But when it makes mistakes with people's welfare, it should be the department that claims responsibility, not the vulnerable people affected.
When C told the Department for Work and Pensions that she was receiving a Widow's Pension, she was assured that it would not affect her Universal Credit claim. She relied on that assurance and spent the money on daily living expenses. It took four years for the DWP to notice its mistake. The department then informed her that she owed £7,258.08.
I talked about C’s case when I spoke against the Public Authorities (Fraud, Error and Recovery) Bill (‘the Bill’) in Parliament during committee stage, but this is not an isolated incident. In 2023-24, 686,756 of the new Universal Credit overpayment debts entered onto DWP's Debt Manager system were caused by government mistakes, a Freedom of Information request revealed.
The government has introduced the Bill in recognition of the harms that both fraud and error cause in the social security system. It includes the introduction of new powers which will allow DWP officials to better identify and investigate fraud, and more easily recover debts from people who have been overpaid, but key features of the Bill have caused concern amongst civil society.
The government has failed to address the elephant-sized difference between fraud and error. The Welfare Reform Act 2012 gave the DWP the power for the first time to recover ‘official error’ Universal Credit overpayments. This represented a significant change to the position that had previously applied to most ‘legacy benefits’.
These DWP mistakes matter. The financial and psychological impact of overpayment debt recovery on individual claimants can be severe. Research by Public Law Project found that recovery of debts, including official error overpayments, by deductions from Universal Credit led to a third of survey respondents becoming destitute. The risk of harm is particularly acute for official error overpayments which individuals have no way of anticipating, leading to sudden, unexpected reductions in income impacting existing fixed commitments and carefully planned budgets.
Public Law Project has also found that recovery of official error overpayments brought an added sense of injustice, with individuals finding themselves in debt due to a DWP error over which they had no control.
The current system of recovering official error overpayments is broken. Andrew Western MP, the minister with responsibility for the Bill, told the Bill Committee that the Department’s policy is “to recover debts as quickly and cost effectively as possible" and "to agree affordable and sustainable repayment plans". However, this is not the reality of DWP practice. Public Law Project regularly sees cases where it has taken years for overpayments to be identified, and their research shows that the DWP’s default approach is to recover all official error overpayments.
The onus is on claimants to request discretionary relief measures, such as reduced repayment rates, or for recovery of the debt to be waived. This is not an easy process, and this has been recognised by the same minister. Worse, claimants are not informed of the DWP’s discretion to waive recovery of debts in correspondence about their overpayments. In 2023/24, only 75 of the 686,756 claimants with official error UC overpayments had their debts waived.
When the government published the Bill, more than 30 civil society groups and welfare experts wrote to the Secretary of State for Work and Pensions calling for a change in the law which would mean that official error Universal Credit overpayments could only be recovered from individuals where they could reasonably have been expected to have realised that they had been overpaid.
As Shameem Ahmed, CEO of Public Law Project has rightly pointed out: “No one is expecting the DWP not to make any mistakes. 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.”
As I did in committee, I am leading on an amendment to the Bill which would take up a key recommendation from the joint letter. This amendment would prevent individuals from having to repay debts caused by DWP errors they could not reasonably have known about. With this amendment, officials would have to consider the fairness of recovering an ‘official error’ overpayment before any recovery was initiated. Measure twice, cut once, and think about the human consequences.
Increasing protections against the recovery of official error overpayments would also create a strong incentive for reducing the rate of DWP errors in the first instance, contributing to a more accurate and better functioning welfare system from the outset.
Let’s use this opportunity to correct this harmful and unfair process and make sure that claimants are not bearing the burden of DWP’s mistakes.
Sian Berry is the Green MP for Brighton Pavilion.
