Due To Pension Rule, DWP Pays £500 Million To Dead People

More than £500 million of taxpayers’ money has been handed out to dead people in just five years because of a pension rule – and families do not have to give it back.

In response to requests for an immediate systemic change, a government minister acknowledged the magnitude of incorrect payouts in previous years.

The Department for Work and Pensions has doled out £511.8 million in state pensions and pension credits since 2019, Parliament has been told in a written answer.

DWP minister Andrew Western was responding to a question from Reform MP Rupert Lowe, who is now demanding changes.

Less than half of the money has been recouped by the government, with only £255 million returned and £257 million still owing – losses which would be enough to cover scrapped winter fuel payments for up to 1.3 million pensioners. 

Mr Lowe, who has been praised his week by X-owning billionaire Elon Musk in contrast to party leader Nigel Farage, described the payouts as ‘a shocking waste’. 

A record-high figure of £159 million was sent out last year to dead people – and there is no legal obligation on families to return wrongly awarded money. 

Although it is still voluntary, the DWP may write to recipients requesting the return of state pension or pension credit distributions.

Mr Lowe’s question submitted for Work and Pensions Secretary Liz Kendall to answer asked if she would ‘make an estimate of the cost to the public purse of pension payments made to deceased recipients in each of the last ten years’.

Mr Western, parliamentary under-secretary for transformation in the DWP, issued the response in which he said only data from the past five financial years could be given.

He insisted that direct payments into the accounts of people who have died represent ‘only around 0.1 per cent of total annual expenditure on pensions’.

Mr Western added: ‘Although these are treated as non-recoverable and are not enforceable by law, we can request the money back as a voluntary payment.

‘So far, we have recovered around half of the overpayments, to avoid this becoming a long-term cost to the taxpayer.’

A total of £458 million was overpaid in state pension, with only £233 million claimed back to leave a net loss of £225 million.

And a further £54 million was mistakenly doled out in pension credit, with just £22 million voluntarily returned and £32 million overall missed out on.

People must register loved ones’ deaths within five days of them passing away or a body being found, or else eight days in Scotland – yet a final state pension payment can often include payments for further days afterwards.

While the state pension is always paid in arrears, people on the old state pension get pension credit in advance, while it is paid in arrears to those on the new version.

Responding to the newly revealed figures, Mr Lowe told the Telegraph: ‘This is a shocking waste that underlines the contempt with which the Government treats taxpayers’ money. Why is it tolerated? Why is the return of this money not enforceable?

‘This is wide open to fraud and abuse. It needs to be clamped down on as part of a wider Government effort to slash down on misspending. We must keep pushing for transparent data to uncover the true extent of the waste.’

Former Liberal Democrats pensions minister Steve Webb, who now works for investment consultancy LCP, said: ‘With pensions routinely paid four-weekly in arrears, it is common that part of any final payment will cover a period after the person has died, even if the family contact DWP promptly.

‘With everything else that the family is dealing with, letters from DWP trying to recover overpayments are unwelcome and should only be sent out if there is a legal basis for them.’

“Voluntary repayables.” A letter that was sent to me years ago did not say that. I seem to recall that I was instructed to repay the excess amount. These letters that the DWP send out make it sound as if you’ll end up in court if you don’t pay.

If one of my family members who had worked hard all their lives had been paid too much. Would I pay it back willingly? No, I would not! Would I care, no! And the reason being, it is the fault of the DWP who obviously couldn’t organise a piss-up in a brewery, and since when did the tallyman work for the DWP?

Within weeks of a loved one’s death, they want their money returned. While some individuals would have little trouble repaying the debt, the DWP lacks humanity; at the very least, they should allow the bereaved family time to grieve.