Charity takes legal action against DWP for disabled claimants' arrears

By agency reporter
April 21, 2018

Child Poverty Action Group (CPAG) is pursuing judicial review proceedings challenging the DWP’s decision to limit backdated payments for disabled people who were underpaid when they were moved from incapacity benefit (IB) to Employment and Support Allowance (ESA) to an October 2014 date. 

The DWP has confirmed that it will defend its decision following the charity’s application for judicial review proceedings last month, although, given the number of people involved and potential amount of money at stake, it has agreed to the case being expedited. CPAG is taking the case on behalf of a claimant who was underpaid from 2012.   He is one of 70,000 disabled individuals in Great Britain who the Government accepts may have been underpaid ESA, in some cases from 2011 onwards. The DWP claims it can 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 prevents payment for prior periods.

But CPAG argues that the oversight which resulted in underpayments arose from an official error - which should be corrected in full – rather than from an error of law which was only shown to be such from a Tribunal decision.

The charity’s legal team point out that DWP internal guidance from 2011 explained the correct way to calculate entitlement to ESA as part of the transfer process so it is not the case that it only became clear to the DWP that the awards were wrong as a result of the decision on 21 October 2014.  As such, they argue, the 70,000 claimants are entitled to receive arrears from the start of the period for which they were underpaid, even if that was before 21 October 2014.

The National Audit Office has said the decision not to pay for periods before 21 October 2014 will result in this group of disabled claimants losing out on between £100 and £150 million pounds. Individual claimants could miss out on up to £10,000 of wrongly underpaid benefits.

The underpayments arose from the DWP’s failure to consider whether claimants who were transferred from IB to ESA qualified for income-related ESA – which can include entitlement to extra premiums -  rather than just  for contribution-based ESA. 

1.5 million people were transferred from older incapacity benefits to ESA between 2011 and 2014.

In December 2017, then Work and Pensions Secretary, David Gauke, announced (2) 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. The process is expected to take about a year and involves 400 DWP staff working through about 300,000 cases to identify those affected.

In January 2018, an Upper Tribunal judge endorsed that approach, but it appears that he did so without the benefit of relevant judicial precedents and relevant internal guidance.   

Child Poverty Action Group’s solicitor Carla Clarke said, “Poor and inadequate DWP processes have left up to seventy thousand disabled individuals without the support they are entitled to.  Justice requires that the DWP error is corrected in its entirety – and full redress provided for the people affected, many of whom are owed arrears from 2011. “  

* 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.

*  Read the National Audit Office, Investigation into errors in Employment and Support Allowance  here

* Child Poverty Action Group http://www.cpag.org.uk/

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