Employment and Support Allowance Payments

Statement

My Lords, with the leave of the House, I shall repeat as a Statement an Answer given to an Urgent Question in another place by my honourable friend the Minister for Disabled People, Health and Work. The Statement is as follows:

“The Department for Work and Pensions is correcting some past underpayments of ESA that arose while reassessing incapacity benefit claims. We realise how important it is to get this matter fixed—clearly, the mistakes should not have happened—and we know it is vital that it is sorted as quickly as possible.

Since I last updated the House in October 2018, we have made significant progress. We are on track to complete work on the majority of the original 320,000 cases by the end of April this year. By 11 February we had started 310,000 people on the reassessment journey and paid arrears of over £328 million to 58,000 people, which is significant progress. The department has also increased the number of staff working on putting these cases right, from around 400 to approximately 1,200, which will enable us to continue to complete this important activity at pace.

Following the announcement in July last year to pay cases back to the point of conversion, I confirmed in October 2018 that that will require us to review an additional 250,000 cases, with activity due to begin shortly, and we aim to complete phase 2 by the end of this year. The department also published an ad hoc statistical publication last Thursday on GOV.UK setting out further detail on the progress that it has made on processing the cases, including an updated estimate on forecast expenditure and the number of people affected. The department now estimates that around 600,000 cases require review and that by the end of the exercise around 210,000 arrears payments will have been made. The increase, compared with the previous estimate of 180,000, is based on additional assumptions and samples, and very careful checking.

Alongside the Written Statement that was published last Thursday, I also published an updated version of the frequently asked questions, which has been deposited in the House Library”.

My Lords, I thank the Minister for repeating that Answer. When, as part of their reforms, the Government moved people across from incapacity benefit to contributory-based ESA, they failed to consider whether or not those people might have been entitled to an income-related ESA, which would have brought with it a potential entitlement to enhanced or severe disability premiums or to housing benefit, council tax benefit and passported benefits. As the Minister has explained, the number of people estimated to have missed out has now gone up from the original 70,000 to 210,000, with a potential bill of £920 million. It took the DWP six years to even begin to sort this out. Even by recent DWP standards, I think we could reasonably say that this is a right mess.

I have two questions for the Minister. First, the department estimates that around 20,000 people have or will have died before payments reach them, so what steps is it taking to identify the families of people in those circumstances? Secondly, the Treasury guidance is very clear that in cases of maladministration or service failure it should seek to,

“restore the wronged party to the position that they would be in had things been done correctly”.

When the Minister spoke in October, I asked her about what was happening to people who had missed out on passported benefits. She said the department was in discussion with other departments about that. Could she please update the House and assure us that no one will miss out or fail to be compensated because they should have got housing benefit, council tax benefit, free prescriptions or free eye tests?

First, my Lords, I repeat that these errors should never have happened, and the department is working extremely hard to make sure that the wrongs that have been done are put right at pace. I want to make it clear that we did not do nothing, as it were, for six years; we started work on this back in 2013. We are working hard with increased support to make sure that we get this right but we want to do it with care. It is very unfortunate that an estimated 20,000 people have deceased since this work began but we are working extremely hard to identify the families.

On passported benefits, I am able to say to the noble Baroness that we are engaging with a number of authorities that are responsible for passported benefits to raise awareness of the ESA underpayment exercise and the potential issues arising from it. This will enable departments across government to understand the impacts on the passported benefits they administer. However, the department does not hold information on what people may or may not have claimed.

My Lords, from the Lib Dem Benches, I thank the Minister for making this important Statement. The issue of passported benefits is extremely important. I wonder how the department has learned from this mistake so that it does not slip up on migrating claimants from ESA to universal credit. Will she use the upcoming managed migration pilot to consider alternatives to the hard stop, so that vulnerable claimants do not have their benefits cut off if they do not make a universal credit application on time?

My Lords, let me make it very clear that those with complex needs will not suffer from a hard stop during the managed migration process. As I have said to your Lordships in previous debates, we are working hard to ensure that we work with stakeholders to pilot the whole scheme of managed migration. On the noble Baroness’s very good question about lessons learned, the key point is that through these errors in migrating people from incapacity benefit to ESA, we have learned that the big mistake made was that we did not make contact with individual claimants. We thought it was great to have an automatic transfer, but the issue was that we did not have all the right, real-time, up-to-date information on claimants. Therefore, some of those who were eligible did not receive these payments.

My Lords, the Minister explained that the number of staff included in this exercise has increased from 400 to 1,200. Can she tell us from where those staff have been deployed and what training they have had?

Again, that is a good question. As the noble Lord will recognise, we have increased the number of people working on this quite considerably. We are increasing our resources from 400 to 1,200 fully employed people to manage all demands. We have taken a considerable number of staff from those who were focused solely on new ESA claimants. Of course, we are not taking new ESA claimants now because they are going straight on to universal credit, so we have a number of considerably well-trained staff. We are also increasing our training across the piece to make sure that people are fully aware of the support and the exercise required. I am pleased to say that I learned from meetings with officials only last week that we are taking on more and more highly skilled individuals, who want to work with us on this exercise and on universal credit.

My Lords, ESA enables passporting to other benefits. What compensation will the department give to those families that lost out from the passporting arrangements? Perhaps I missed something in what the Minister said earlier, but my other question is: what will happen to the payments that would have been due to people who have now deceased? Will their families benefit from these payments by way of compensation?

On the first question, the reality is that we are reviewing all cases potentially affected and paying any arrears of past payments that are due. Our focus is on paying arrears to claimants in line with the primary legislation. With regards to those who have already, sadly, deceased, we are making sure that the money that would have been paid to those individuals will be paid to the families.