The Department for Work and Pensions (DWP) has come under fire for overpaying more than £512 million in state pensions and Pension Credit to deceased individuals over the past five years, with £159 million paid out just last year alone. This staggering sum has raised serious concerns about the management of taxpayer money and prompted calls for urgent reform.
According to reports, the DWP has struggled to recover these overpayments, with only £255 million recouped so far—less than half of the total amount distributed. The situation highlights the lack of legal obligation on the families of deceased claimants to return the money, leading Reform MP Rupert Lowe to call for systemic changes.
Lowe expressed his frustration, stating, "This is a shocking waste of taxpayers’ money which underlines the contempt with which the Government treats public finances. Why is this tolerated? Why is the return of this money not enforceable? This is wide open to fraud and abuse, and it needs to be clamped down on as part of wider efforts to curb government misspending." His remarks came after he raised the issue during parliamentary discussions, prompting significant attention to the DWP's practices.
To put the figures in perspective, around £512 million has been mistakenly sent to deceased claimants since the 2019-20 financial year. This includes payments to both the old and new state pension systems, with the old pension amounting to £169.50 per week for eligible individuals and the new state pension offering £221.20 per week. Pension Credit, which supports low-income pensioners, is also affected, with government figures indicating £54 million was misallocated over the same period.
Despite existing laws requiring deaths to be reported within days of passing, many families still receive pension payments covering periods after the individual has died. Sir Steve Webb, former pensions minister, remarked on the emotional toll this takes on grieving families. He pointed out, "With pensions routinely paid four-weekly in arrears, it is common for final payments to cover part of the period after the person has died, even when families contact the DWP quickly. Letters demanding repayment just add to the distress at what is already a difficult time." Webb emphasized the need for the DWP to reconsider how they approach these repayments, advocating for contact only when absolutely necessary and legally justified.
Although the DWP has acknowledged the issue, their parliamentary under-secretary Andrew Western stated, "Direct Payments made to the account after the death of the customer represent merely around 0.1 percent of total annual expenditure on pensions. These are treated as non-recoverable but can be sought back as voluntary payments." He reassured the public, saying, "So far, we have recovered around half of the overpayments to prevent it from becoming a long-term cost to the taxpayer." This statement brought some clarity, yet many critics argue it highlights the need for legal frameworks ensuring sounder fiscal responsibility.
With over half of these funds unrecovered, it’s evident the DWP faces significant challenges. The £257 million still at stake could have assisted roughly 1.3 million pensioners with necessary winter fuel payments, raising concerns about the impact on vulnerable populations. The situation not only signifies fiscal mismanagement but also poses questions about accountability and transparency within the DWP's operational frameworks.
The DWP recently declined to comment on inquiries from GB News, leaving the public with more questions than answers. Stakeholders continue to press for accountability and reform, stressing the urgency of the matter and potential ways to improve financial governance moving forward.
The focus shifts now to the government as it grapples with public dissatisfaction and demands for reform. Stakeholders, including fellow politicians and the concerned public, are watchfully waiting as discussions intensify on how to safeguard taxpayers’ money and address the systemic issues leading to such overpayments. Without immediate and effective changes, the legacy of the DWP's mismanagement threatens to perpetuate the waste of resources meant to support those most in need.