Benefit errors by officials cost over £700million a year!

by Dr. Ros Altmann

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The annual cost of compensation for those who lost their pensions in scheme wind-ups and are already past pension age would be around £45m a year for the next few years until 2011.  This sum is almost insignificant in the DWP budget and it is quite extraordinary that the DWP is refusing to agree to commit the funding needed to remedy the biggest pension scandal this country has ever seen – a scandal created and prolonged by Government itself.

Just look at the amounts of taxpayers’ money that has been wasted by officials who have overpaid benefits to people by mistake!  These amounts make the cost of compensation pale into insignificance, yet those same officials who have wasted hundreds of millions of pounds of taxpayers money each year on paying benefits to people who were not entitled to them,  are refusing to accept that they did anything to mislead members of final salary schemes about the safety of their pensions and are leaving them without their pensions – even without some of their state pension too.

Cost to taxpayers of errors by DWP official mistakes overpaying benefits in 2005-6*


Income support £200m
Housing benefit £150m
Pension credit £130m
Disability living allowance £60m
Incapacity benefit £ 50m
Jobseeker’s allowance £ 50m
Council tax benefit £ 40m
State pension £ 30m
Other £ 15m
TOTAL OVERPAID BY OFFICIAL ERROR £725m

*NB These figures are rounded to the nearest £10m

Source:  Written answers Hansard 10 July 2006, Column 1570W

MPs have the power to sort this out by backing amendments to the current Pensions Bill as it goes through Parliament.  It is time for democracy to assert itself and for MPs to support natural justice and moral decency on this issue.


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