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Employment Support Allowance: Fixing botched benefit reforms could cost £1bn | Politics News

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The final cost of fixing errors caused by reforms to sickness and disability benefits could be as high as £1bn, MPs have warned.

Hundreds of thousands of claimants who saw their payments combined into the Employment Support Allowance (ESA) were underpaid between 2011 and 2014 to the tune of £340m.

The Department for Work and Pensions (DWP) claimed to have sorted out the underlying issue, but was forced to admit in February that 30,000 extra cases had been identified, despite new guidance being published.

It has now trebled the number of staff tasked with fixing the system, from 400 to 1,200.

The latest expected cost for administering payments to 310,000 underpaid claimants will be £21m in 2018/19 and £19m in 2019/20, the DWP said.

File photo dated 08/12/14 of Labour MP Frank Field
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MP Frank Field described the assessment process as ‘awful, painful, error-ridden’

DWP select committee chairman Frank Field said the cost of fixing the system is now expected to be almost £1bn.

“DWP has been forced to admit that just the admin of fixing its own catastrophic incompetence is going to add another £40m to the cost of this serially botched operation,” he said.

“Imagine what that money could have done instead for families across the country who are struggling to feed their children and heat their homes.”

He criticised the “awful, painful, error-ridden” assessment process and the “miserable and lengthy” appeal process.

“You might think that this shameful, damaging waste would at least focus minds at DWP on making sure this never, ever happened again,” the Labour MP said.

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File photo dated 18/12/014 of the Department for Work and Pensions, as ministers have announced an overhaul of disability benefits, that they say will give around 10,000 people an extra £70 to £90 a week.
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The DWP has trebled the number of staff tasked with fixing the system

“But we are already starting to hear about people whose incomes have been slashed because they’ve been wrongly advised to claim Universal Credit, and there’s no way back.

“If ministers want to avoid another billion pound scandal, they need to get a grip on this – and fast.”

More than two million people were receiving incapacity benefits at the time the DWP began to switch people over to ESA in 2011, and 1.5 million have been reassessed since then.

There are two main types of ESA – a contribution-based model based on national insurance contributions, and an income-based model that allows claimants to receive extra payments.

Known as premiums, these extra payments can be made available to those who are severely disabled, require a carer, or are a pensioner.

But for many of those who were switched over from incapacity benefits, the DWP did not consider whether they may have been entitled to an income-related ESA and they have therefore missed out on their premiums.

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