What went wrong?
ESA was introduced in October 2008 for people who have limited capability to work because they have a disability or are ill.
Between January 2011 and October 2014, some people receiving incapacity benefit and severe disablement allowance were moved to ESA.
The ESA they were moved to depended on their situation:
- Contribution-based which depends on national insurance contributions.
- Income-related which is a means-tested benefit. Income-related ESA can be paid on its own or as a top-up to contribution-based ESA.
But in some cases, it wasn’t considered whether the claimant may also have been entitled to income-related ESA as well as contribution-based ESA. This means they may have missed out on extra payments, such as the enhanced disability premium.
The DWP is currently in the process of reviewing 570,000 ESA cases which could be affected, and expects to have checked 320,000 by the end of the 2018/19 financial year.
Based on its latest data, it estimates 180,000 people could be owed money. A DWP report published today says: “On average, the Department estimates that affected individuals could be due around £5,000 in arrears. However, the actual amount payable will vary among individuals and depend on their circumstances.”
The DWP also estimates that once the errors have been corrected, it will have to make additional payments on an ongoing basis worth £60 million in 2018/19 and £130 million in 2019/20, then declining over time to £90 million by 2024/25.