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Friday 16th of July 2010
March 17, 2010    

DWP urged to improve efforts to recover benefit overpayments

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by Kay Murchie

A report has found benefit claimants owe a staggering £1.85 billion in overpayments but less than £300 million a year is being recouped.

As a result, the public accounts committee is calling for the Department for Work and Pensions (DWP) to step up its efforts to recovery the monies.

According to the report, over 30,000 people owe around £10,000, while 100,000 people have four or more different debts.

However, the Government claims that recovering debt has “improved” since the amount reclaimed grew from £180 million in 2005-06 to £281 million in 2008-09.

However, overall debt is continuing to grow - hitting £1.85 billion in March 2009 - an 11% rise on two years before.

The situation is likely to deteriorate, according to the committee, reflected by the squeeze on British households due to rising unemployment.

In the meantime, the report revealed income support claims accounted for almost three-quarters of all debts, while £9.3 million of overpayments of less than £65 were written off during 2007-08 because they were considered too small to justify the cost of recovering them.

Commenting on the findings, Edward Leigh, chairman of the committee, said: ”An immense amount of money, currently £1.85 billion, is owed to the Department for Work and Pensions by claimants who have been paid too much benefit.

“The size of the debt is increasing, moreover, as the amount of overpaid benefit being clawed back is outstripped by the amount referred for recovery action. The current economic malaise is only likely to make worse the rate at which debt can be recovered.

“If the department is to deal with this rising trend in benefit debt, then it has to improve the way it approaches the prevention of debt. It should also review its procedures for validating claims for Income Support, a benefit which is particularly susceptible to big overpayments,” concluded Mr Leigh,

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