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PIP Underpayments Highest Ever Recorded For Any Benefit

July 1, 2019

With many thanks to Benefits And Work.

The level of underpayments of personal independence payment is the highest ever recorded for any benefit, the National Audit Office (NAO) has revealed in its latest report on the DWP this week

The NAO qualified its opinion of the DWP’s accounts, as it has done every year since 1988.

But this year it found that the levels of both underpayments and overpayments by the department were at their highest ever level, since a new system of accounting was introduced in 2005.

The NAO reports that once state pension, where fraud and error is very low, is removed from the equation, the estimated level of overpayments has increased to 4.6% (£4.0 billion), from 4.4% (£3.7 billion) in 2017-18.

Underpayments have increased to an estimated 2.2% (£1.9 billion) of benefit spending, from 2.0% (£1.7 billion) in 2017-18.

The highest level of overpayments is for universal credit, with a startling rate of 8.6% – the highest for any benefit since tax credits in 2003-04. Claimants failing to declare income and earnings correctly was the main cause of overpayments, according to the DWP.

Most alarming, from the NAO’s point of view, was the discovery that the DWP expects overpayments to continue to rise over the next six years, mainly due to the roll-out of UC

The estimated rates of PIP overpayments rose from 3.1% in 2017-18 to 3.5% in 2018-19.

Meanwhile, PIP underpayments rose from 3.7% to 3.8%.

The DWP claims the main cause of both overpayments and underpayments is claimants failing to report changes in their condition. They insist that in 85% of cases it is the claimant who is at fault for underpayments.

The NAO report says it understands that the DWP “is focusing on telling claimants when they need to notify changes, but it has some way to go to ensure that claimants provide timely information so that their Personal Independence Payment claims remain accurate.”

But with hundreds of millions a year being saved through underpaying PIP, and the DWP happy to place almost all of the blame on claimants, it’s hard to see the situation changing anytime soon.

You can download the NAO report from this page.

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