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An estimated 70,000 claimants have been underpaid ESA due to incorrect assessment when they were transferred from Incapacity Benefit onto ESA


An estimated 70,000 claimants have been underpaid ESA due to incorrect assessment when they were transferred from Incapacity Benefit onto ESA. This error relates to those who moved from Incapacity Benefit onto Contributory ESA, but who should have received a top-up of Income Related ESA too - due to their eligibility for the Enhanced Disability Premium or the Severe Disability Premium. This issue, discovered and highlighted by welfare rights advisers across the country, has been acknowledged by the government, who have said there will be a trawl to identify claimants who have lost out. 

There is an on-going issue regarding the date they can get their underpayment paid back to. The transfer process started in 2011, however the government is arguing that arrears should only be paid back as far as 21 October 2014, which is the date of an Upper Tribunal decision. That decision held that ESA was a single benefit and separate claims were not required for the contributory allowance and the income-related allowance. So the government is arguing that the 'anti-test case rule' means arrears should only go back to the date of this decision. The Child Poverty Action Group (CPAG) has launched Judicial Review proceedings against the refusal to pay arrears before 21 October 2014. CPAG believes that the oversight which resulted in the underpayments arose from an official error - which should be corrected in full -

'... DWP internal guidance from 2011 explained the correct way to calculate entitlement to ESA as part of the transfer process so it is not the case that it only became clear to the DWP that the awards were wrong as a result of the decision on 21 October 2014.  As such ... claimants are entitled to receive arrears from the start of the period for which they were underpaid, even if that was before 21 October 2014.'

If you are aware of someone who has been underpaid because their ESA was incorrectly calculated when the DWP transferred them from Incapacity Benefit to ESA, and they are not yet getting a top-up of Income-Related ESA, they could request an ESA3 form from the ESA dept so they can get a top-up of Income Related ESA. They will need to provide details of their other income and savings throughout the whole period. This should NOT trigger a claim for Universal Credit! 

The DWP are are trawling 300,000 cases which migrated from Incapacity Benefit to ESA between 1/1/11 and 31/12/14, regardless of what their current circumstances are. Some will still be on ESA, some on UC and some no longer claiming benefits. A specialist team will be writing to and telephoning these people. For anyone identified as having been incorrectly assessed when they went onto ESA, the DWP will need details of all their changes of circumstances from date of conversion onwards, so they can work out the arrears.

If you know of any particularly vulnerable claimants, who would need to be prioritised in the trawl, you can contact: dawn.barlow@dwp.gsi.gov.uk - this contact is for ADVISERS ONLY - not to be given to claimants.

If the claimant was transferred onto ESA before 21 October 2014 and the DWP have paid arrears from 21.10.14 onwards, but refused to pay arrears for periods before that date, the best advice is not to request a Mandatory Reconsideration against the decision to limit the arrears just yet. The best advice is to wait until the outcome of the Judicial Review and an appeal against an Upper Tribunal decision on which the DWP's policy to limit arrears is based. 

There are two reasons for this is. Firstly, if either / both of these challenges are successful, the DWP will be obliged to pay the arrears back to the date of transfer from Incapacity Benefit to ESA anyway. Secondly, in any appeal about arrears for periods before 21 October 2014, the DWP is very likely to have refused to revise the conversion decision – ie, refused to revise a decision which is more than 13 months old. Caselaw says that where there has been a refusal to revise a decision which is more than 13 months old, there cannot then be a right of appeal against that decision!

It would, however, be worth keeping a list of anyone affected by this limitation, so that you can contact them when more information is known, and please check this page for news. We will update this information as this matter develops.