Disabled people will be paid more than £100 million extra in backdated benefits owed by the government, after a U-turn by work and pensions secretary Esther McVey on the eve of a court hearing.
The Department for Work and Pensions (DWP) had previously only agreed to offer a partial backpayment to an estimated 70,000 disabled people who for years did not receive the correct level of out-of-work disability benefits.
The underpayments were caused by the botched migration of former claimants of incapacity benefit and other benefits to the new employment and support allowance (ESA) from 2011 onwards.
The department failed to realise that many of the claimants were entitled to income-related ESA – and therefore to associated disability premiums – rather than just the contributory form of ESA.
Although DWP had previously agreed to pay back as much as £340 million to those affected – with average payments likely to be about £5,000 – it had said it would only backdate arrears to 21 October 2014, the point at which the upper tribunal ruled that DWP should have assessed claimants for both income-related and contribution-based ESA when deciding their entitlement.
DWP had been refusing to pay back another £100 million to £150 million in arrears that dated from before 21 October 2014.
But yesterday (Wednesday), McVey announced that claimants would receive arrears backdated to the date they moved onto ESA, with some claimants now likely to receive up to £10,000 more in arrears.
It is just one in a series of major errors by DWP senior civil servants relating to disability benefits, with the department now believed to be carrying out six separate trawls through the records of disabled people unfairly deprived of benefits.
In a written statement to MPs, McVey said that individuals contacted about their backpayments could expect to receive the “appropriate payment” within 12 weeks after the “relevant information” has been gathered.
Those who have already received arrears payments from 21 October 2014 will have their cases looked at again, with additional arrears paid dating back to the date they were moved onto ESA.