Department for Work and Pensions Reports Significant Overpayment Figures
The balance of debt owed to the government due to benefit fraud and erroneous overpayments is projected to increase before it eventually decreases, according to officials from the Department for Work and Pensions (DWP). Peter Schofield, the department’s permanent secretary, informed MPs that approximately 4% of benefit expenditure resulted in overpayments during the last financial year.
In the 2021-22 period, the DWP overpaid an estimated £8.6 billion in benefits, with £6.5 billion attributed to fraudulent claims, as outlined in the department’s latest annual report. This figure represents an increase from £8.2 billion in the previous year.
Throughout 2021-22, DWP debt recovery teams managed to recover around £2.7 billion, a rise from approximately £2.3 billion in 2020-21. This recovery encompasses repayments of advances, tax credit debts transferred from HM Revenue and Customs, overpayments, and loans.
As of March 2022, the DWP reported a total of £7.6 billion owed due to overpaid benefits, advances, and tax credits from about five million claimants. When questioned about the timeline for recovering this debt and whether the balance would ever decrease, Mr Schofield explained, “As we become more successful at identifying fraud and conducting targeted case reviews, we will inform individuals of their debts, thereby adding to the overall debt balance.”
He noted that while efforts to tackle fraud may initially increase the debt figures, these actions are necessary to ensure recovery. “I suspect that, due to the introduction of tax credits and our anti-fraud initiatives, debt balances will rise before they begin to decline,” he stated.
Mr Schofield also highlighted that staff responsible for debt recovery approach claimants with compassion and empathy, taking individual circumstances into account when discussing repayment options.
