Benefits bill of over £1.5bn set to be owed

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The UK Government is facing a benefits bill of more than £1.5 billion after underpaying tens of thousands of disabled claimants, newly released documents have shown.

An estimated 180,000 people are due arrears payments totalling £970 million after under-receiving Employment and Support Allowance (ESA), Department for Work and Pensions (DWP) papers have shown.

And the cost of paying them extra after their claims have been corrected is estimated to add another £700m over the next seven years, taking the total extra bill to £1.67bn.

The papers noted: “The Department estimates it will pay £970m in historic underpayments largely over the financial years 2018/19 and 2019/20.

“In addition, it will pay higher awards to active claimants after their claim is corrected.”

The payout results from a decision by work and pensions secretary Esther McVey to ditch a policy of refusing to reimburse missed payments dating back before October 2014.

The DWP analysis estimates the average back payment to each claimant owed money will be £5,000, although the average paid back so far is £7,000. DWP minister Sarah Newton said it was looking into 570,000 cases.