CPAG legal action leads to full arrears for disabled claimants

July 18, 2018

Child Poverty Action Group welcomes the Work and Pensions Secretary’s announcement today that arrears for up to 70,000 disabled people who were underpaid when they were moved from incapacity benefit (IB) to employment and support allowance (ESA) will be backdated to the date that they moved to ESA. The announcement follows legal action from CPAG which challenged the Department’s original decision to limit backdating of the arrears to 2014, the date of a tribunal decision. The underpayments arose following an error by DWP staff that caused hardship to a large number of disabled people.

The Department for Work and Pensions has agreed to ask the Upper Tribunal to make an order by consent conceding that CPAG’s position – that backdating of the payments should not be limited to 2014 but instead should be backdated to the date of the original error - was the correct one.

CPAG took the judicial review proceedings on behalf of a claimant who was underpaid from 2012. He is one of 70,000 disabled individuals who the Government accepts may have been underpaid ESA, in some cases from 2011 onwards. The DWP claimed it could only pay arrears back to 21 October 2014 because it was then that an Upper Tribunal decision demonstrated that it was assessing awards in the wrong way and thus section 27 of the Social Security Act 1998 prevented payment for errors made before this time. However, CPAG argued that the oversight, which resulted in underpayments, had been one which the DWP knew to have been a mistake before the Upper Tribunal decision and as such counted as “official error” which could be corrected in full with payments backdated to the date of the error in each case.

The National Audit Office (3) has said that the decision not to pay for periods before 21 October 2014 would have resulted in this group of disabled claimants losing out on between £100 and £150 million pounds. As a result of the case individual claimants could now receive up to £10,000 of wrongly underpaid benefits.

Child Poverty Action Group’s solicitor Carla Clarke said:

“Poor and inadequate DWP processes left up to seventy thousand disabled individuals without the support they should have received to help them with their additional costs. Justice required that the DWP error was corrected in its entirety for the people affected, many of whom are owed arrears from 2011. We are pleased that the DWP agreed that this was correct following our legal action. However, it shouldn’t be necessary to take a government department to court to achieve justice for people who have been failed by officials making avoidable errors”.

1.5 million people were transferred from older incapacity benefits to ESA between 2011 and 2014. The underpayments at issue arose from the DWP’s failure to consider whether claimants who were transferred from incapacity benefit to employment and support allowance qualified for income-related ESA - which can include entitlement to extra premiums - rather than just for contribution-based ESA.

In December 2017, then Work and Pensions Secretary, David Gauke, announced (4) that the Department for Work and Pensions would undertake a trawl of cases to identify those claimants who had been underpaid and put things right.

Notes to Editors:

(1) Today’s Statement from the Secretary of State for Work and Pensions 

(2) The Public Accounts Committee published its report into Employment and Support Allowance on 18 July 2018

(3) National Audit Office, Investigation into errors in Employment and Support Allowance, HC: 837, 2017-19 Published date: March 21, 2018 

(4) Employment and Support Allowance:Written statement - HCWS356

(5) ESA is paid to people who have limited capability for work as a result of illness or disability. In 2011 the DWP began moving eligible claimants on to ESA from previous benefits such as IB, Severe Disablement Allowance and Income Support.

(6) Tom Royston (Garden Court North) and Richard Drabble QC (Landmark Chambers) were the barristers instructed in the case. The client was referred to Child Poverty Action Group by Greenwich council’s Welfare Rights Service which is identifying affected claimants in the borough.

 

Further information from CPAG media contact Jane Ahrends on 020 7812 5216 or 07816 909302