The Department for Work and Pensions (DWP) has admitted mistakenly paying out £500 million in benefits to the dead. Worryingly, the DWP has struggled to recover millions of pounds of the overpaid state pension and Pension Credit funds given to claimants who have passed away.
Records reveal that around £512 million was incorrectly paid out since the 2019-20 financial year, with £159 million of that amount going unrecovered in the last year alone. These figures came to light following a Parliamentary Question by Reform MP Rupert Lowe. He said that the information showed that over the past five years, £512m in pensions were paid to deceased individuals, yet only £255m has been reclaimed.
Speaking to The Telegraph, Mr Lowe called for a thorough overhaul. He said: “This is a shocking waste that underlines the contempt with which the Government treats taxpayers’ money. Why is it tolerated? ” Mr Lowe then added: “Why is the return of this money not enforceable? “.
He said the current system is “wide open to fraud and abuse”, reports Plymouth Live. He added: “It needs to be clamped down on as part of a wider Government effort to cut down on misspending.”
Mr Lowe emphasised the need for openness, stating: “We must keep pushing for transparent data to uncover the true extent of the waste”. Great Yarmouth’s Labour MP, Andrew Western, the DWP’s parliamentary under-secretary, said: “Direct Payments made into an account after the death of a customer represent only around 0.1% of total annual expenditure on pensions.”
He added: “Although these are treated as non-recoverable and are not enforceable by law, we can request the money back as a voluntary payment. So far, we have recovered around half of the overpayments, to avoid this becoming a long-term cost to the taxpayer.”
Current legislation requires that deaths be reported within five days in England and Wales, or eight days in Scotland. However, due to system inefficiencies, the DWP often continues to issue state pension payments posthumously.