Payment errors at Universal Credit – which are already running at record levels – will increase as more people look forward to getting benefits during the coronavirus pandemic.
MPs warned that losses from benefit fraud and errors could more than double.
The Commons Public Accounts Committee said that even before the disease hit, the Department for Work and Pensions (DWP) had overpaid £ 4.5 billion in 2019-2020 – accounting for 4.8 percent of total benefits expenditure (excluding pensions) of £ 93.1 billion.
The highest rate of error occurred at Universal Credit (UC), with about one pound per £ 10 being wrongly paid.
The commission said the total number of errors in UC payments could more than double as unemployment increases and the DWP is forced to drop some of the controls it would normally perform to prevent fraud.
The DWP estimates that overpayments of UC in 2019-2020 were £ 1.7 billion (9.4 percent of the total), while there were underpayments of £ 0.2 billion (1.1 percent).
Between February and August alone, the number of UC plaintiffs rose from 2.9 million to 5.6 million.
The commission said that as a “rough estimate,” doubling the caseload alone could result in an additional £ 1.9 billion in fraud and errors, even without taking into account the effect of relaxing some controls.
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Despite the DWP adopting new “data and analysis tools” to address fraud and errors, the commission said overpayments continued to rise.
It expressed concern that the application of technology could lead to discrimination and prejudice against some claimants on the basis of their “protected characteristics” such as age, gender and race.
It said those who were overpaid and underpaid were among the people least inclined to pay back the money if errors were discovered or to make up for a shortage of income.
The committee chair, Meg Hillier, said: “DWP employees deserve a lot of credit for the incredible work they have done to get benefits to millions of new applicants in a crisis, many of whom never expected to depend on the social safety net.
But the DWP’s system of correcting its mistakes can punish the least secure with even more debt and even lower incomes.
DWP has now finally set itself the goal of reducing error rates and fraud – it must ensure that the resources it uses to get there, further marginalize and discriminate against those who have little or no financial resilience. what these errors lead to. “