The Department for Work and Pensions (DWP) mistakenly paid out £850 million in benefits to recipients who had passed away, due to various circumstances such as delayed death notifications or benefits being scheduled for payment after the recipient’s death.
Instances of overpayments can also occur when claimants are hospitalized or placed in care facilities where their expenses are covered by the NHS or local authorities. Disability payments like PIP are typically halted or paused if the recipient has been in a hospital for 28 days.
Although the specific types of overpaid benefits remain undisclosed, reports suggest a combination of mental health support, unemployment benefits, state pensions, and others were involved. An investigation found that since 2021, 2.6 million errors had been recorded, with less than half of the £850 million reclaimed.
A DWP spokesperson stated that the department aims to recover all debts deemed feasible and cost-effective. They urge individuals who have recently lost a family member to utilize the Tell Us Once service to simplify the notification process of a death to government agencies.
Following recent developments, the DWP has been granted enhanced authority to verify benefit eligibility through new bank account monitoring capabilities. The Public Authorities (Fraud, Error and Recovery) Act 2025 empowers the DWP to mandate financial institutions to check account details to validate entitlement to benefits, including savings and overseas spending.
For instance, Universal Credit claimants are typically restricted to savings below £16,000, while Pension Credit recipients must not exceed a four-week absence abroad. Notably, the DWP is prohibited from directly accessing account information or real-time transactions.
If potential discrepancies are flagged by the bank, the DWP conducts further investigations, emphasizing that benefit determinations are not solely based on bank data. In certain scenarios, the DWP can recover owed funds directly from a claimant’s bank account without a court order.