Inaccuracies in benefits cost billions
The Department for Work and Pensions (DWP) has released the latest data on fraud and errors in the benefit system. The release of this data has resulted in the DWP urging the public to check what they receive, as inaccuracies in benefits can cost billions.
The data shows that 4% of benefit expenditure was overpaid in the financial year ending April 2022. This is the highest overpayment rate to date, amounting to a whopping £8.6 billion in overpayments.
In contrast, however, 1.2% of benefit expenditure was underpaid. This means £2.6 billion in benefit payments were not received by people.
In terms of pensions, the total overpayment rate in the financial years ending April 2022 for the State Pension was 0.1%. This may seem a small figure but totals up to a huge £110 million overall. Total underpayment rates for the State Pension were higher, at 0.5%. This is £540 million which was not paid to people who are entitled to it.
Pension Credits were also both overpaid and underpaid to those who receive them. The Pension Credit overpayment rate increased by 2.0 percentage points in the financial year ending in 2022. This is the highest recorded rate from the year 2020 to 2022. The overpayments saw an increase from 5.3% to 7.3%, overpayments of £270 million and £350 million respectively.
The underpayment rate for Pension Credits did decrease, however. The percentage decreased from 2.3% to 2.1%, taking the total underpayments from £120 million to £100 million. This means £20 million extra payments were made to those who are entitled.
What the experts are saying
Helen Morrissey, senior pensions and retirement analyst at Hargreaves Lansdown:
“In the huge majority of cases benefits are paid out correctly but this data shows that it’s always worth checking if you think you are receiving too much or too little. Over and underpayments amount to billions of pounds per year and if you have been receiving too much money from your benefits then you could be asked to pay it back.
These errors can happen for a variety of reasons. There are fraudulent claims for benefits but in many cases the issues are caused by official or claimant error.
As well as overpayments benefits can also be underpaid. This data shows the recent issues the DWP have faced in the long-term underpayment of state pension to certain groups such as women retiring under the old state pension system who should have received state pension top ups based on their spouse or civil partners’ national insurance record but didn’t. This is a wide scale issue with some women in line for repayments worth several thousand pounds. If you think you may be affected, you should contact DWP.
If you think you might be receiving too much or too little in benefit income, then it is important to check. You could end up receiving more than you thought and make it far less likely you will receive an unexpected bill.”