Hundreds mistakenly paid over £20k in benefits last year allowed to keep money

Most of the overpayments were triggered by innocent paperwork errors but a total £2.3mn was attributed to claimant fraud
Most of the overpayments were triggered by innocent paperwork errors but a total £2.3mn was attributed to claimant fraud - MATTHEW HORWOOD/ALAMY

Last year, more than 500 people were allowed to keep £20,000 or more in benefits that were wrongly paid to them, The Telegraph reveals.

Within this group, £17.5 million in benefits were paid out in error and written off by administrators – amounting to an average of £30,674 per person.

Although most of the overpayments were triggered by innocent paperwork errors, there were 75 cases where claimants were fraudulently allowed to keep a total of £2.3 million they were not entitled to.

The 569 write-off cases were revealed following a freedom of information request from The Telegraph to the Department of Work and Pensions (DWP).

Overall, the department wrote off last year a total of £329 million in benefits that had been paid out by mistake and another £6 million that had been pocketed by fraudsters.

The DWP also provided details on the cases of the biggest outstanding debts that it is still chasing down, which includes one person who now owes £547,000 in overpaid benefits.

This person, who pocketed the cash through a mixture of fraud and paperwork errors, has been asked to pay back the debt at the rate of £130 per month – meaning it will take them 350 years to completely settle the debt.

Another person swindled the DWP out of £491,000 in benefits they were not entitled to, and they were now trying to track them down to start a repayment programme.

In a separate case, the DWP was involved in a probate dispute with the relatives of a person who fraudulently claimed £343,000 in benefits before they died.

The report comes after a gang of five Bulgarians living in Britain were sentenced for defrauding the British taxpayer of £50 million in Universal Credit payments earlier this year in the country’s biggest-ever benefit fraud.

‘Complete failure’

Joanna Marchong, the investigations campaign manager of TaxPayers’ Alliance said: “Taxpayers will view this as a complete failure from the Department of Work and Pensions.

“Writing off these overpayments, even after errors have been identified, is not just an act of laziness, but a costly one at that. DWP negligence is directly hitting the pockets of hard-working taxpayers, costing them millions.

“The government needs to be diligent in ensuring that only those who qualify and truly need benefit payments receive them and that they receive the correct amount.”

Last year in total, the DWP said £7.4 billion was lost to fraud from the benefit budget and another £2.4 billion to errors made by either the claimant or officials.

The figures mean that every day almost £27 million in benefits is being paid out in error. The state attempts to recover the money in many cases but writes off some debts in cases where it decides there is no prospect of getting anything back.

A DWP spokesman said: “This government will not tolerate fraud or waste anywhere in public services, including in the social security system.

“We are determined to reduce fraud and error and are currently exploring all options on how best to achieve our goal.”