£26 million pensioner benefits blunder - but they can keep the money

By Jayne Warren - 21/11/2007

The Department of Work and pensions (DWP) has revealed that it has paid out £26 million of taxpayers' money to elderly disabled pensioners in a benefits blunder. In fact there are more than 4,000 cases dating back to 1996 where claimants were paid their benefits twice.The Government has said that "because the recipients are elderly and disabled" they will not have to pay it back.

The error originally arose because The Disability Living Allowance (DLA) and Attendance Allowance (AA) benefits are usually administered by the Disability and Carers Service. But pensioners get the benefits combined with their pension in one weekly payment, and in nearly 4000 cases the benefits were paid by both the Pensions Service and the Disability and Carers Service. And they have been doing it since 1996, totaling an overpayment of some £26 million.

Junior minister James Plaskitt said: "Steps have already been taken to prevent such duplicate payments occurring in the future. However, given that the customers involved are both elderly and disabled, I have decided not to seek recovery of past overpayments, some of which go back as far as 1996, in cases where the customer clearly did not know they were being overpaid."

The real problem will for those who have been overpaid to adjust to their new, severely reduced level of income - however accurate it might be. But some cases may be more troublesome. Mr Plaskitt continued: "We believe that around 50 cases involved people with a terminal illness, and I judge it would not be appropriate to cause them and their families additional worry. In these cases, I propose to make ex-gratia payments to maintain the higher level of payment, which will cost under £200,000 a year."

He also added that single ex-gratia payments of between £100 and £350 will be made in all other cases, at a cost of up to £1.3 million.

In all fairness, the DWP's handling of the situation has been extremely delicate and sensitive. But I wonder is how generous it really is? For example, what about the estimated 2.5 billion that goes unclaimed by pensioners every year because of the confusing benefits system? Considered in that light it's not so generous really, is it? Even totting up the original £26 million and the total ex-gratia payments of £1.3 million, that still represents a tiny percentage of what the Government saves each year.

Just about enough to cover MP expense accounts, vast numbers of well-paid civil servants and their generous pension schemes then ...