Major changes to the benefits system recently became law
The Department for Work and Pensions has provided details about major changes concerning Universal Credit. High-ranking officials from the DWP appeared before the Work and Pensions Committee to answer questions about many areas of their work.
They discussed their endeavours to guarantee claimants receive the correct benefit amounts. This includes work to rectify historical problems with state pension underpayments, as well as overpayments for other benefits, such as Carer’s Allowance. The committee was particularly interested in hearing about the department’s work to combat incorrect and fraudulent payments.
The DWP leaders were specifically questioned about Universal Credit, where the overpayment rate stood at 9.7 per cent for the 2024/2025 tax year, with more than £6.3billion being wrongfully paid out. This represents a more than threefold rise compared to the £1.7billion figure for 2019/2020.
‘A big focus’
DWP permanent secretary Peter Schofield assured the MPs that he is dedicating considerable effort to clamping down on this. He said: “Absolutely this is a big focus for us in the department. Coming out of the pandemic, we set out a tackling fraud and error plan, to really drive down fraud and error, and a number of measures that we took.”
He explained that examining the percentages, the overpayment rate for Universal Credit stood at 9.4 per cent before the pandemic, climbing to its peak of 14.7 per cent in 2021/2022, before decreasing to 9.7 per cent in 2024/2025. Mr Schofield said that more measures are being implemented to tackle overpayments: “We’ve also had the Budget, new measures announced, we’ve had the act of Parliament, that gives us new tools.”
Fresh legislation has been introduced with a suite of new anti-fraud measures, including bank account checks to confirm the eligibility of Universal Credit claimants. These eligibility checks will also apply to recipients of Pension Credit and Employment and Support Allowance, and could be extended to other benefits.
DWP targets
Mr Schofield expressed optimism about future improvements: “The OBR as part of their forecast in the Autumn produced their assessment of where all our measures would get us going forward. That showed us going down with fraud and error in Universal Credit going down to 4.7 percent in 2028/2029. That’s well below the pre-pandemic level.”
The senior civil servant outlined his ambitions for the broader welfare system: “If you apply that across the whole benefits system, then that would take fraud and error in the entire benefits system to 2.8 percent, which on a comparable basis is lower than it has ever been before. That is what I’m aiming for, that is my target.”
The DWP chief also discussed his plans to intensify measures to stop incorrect Pension Credit payments. Mr Schofield informed the committee: “Where we’ve focused on fraud and error really hard – and we’ve started with Universal Credit because it was the biggest area of loss we’ve seen big improvements – we can now turn our attention to Pension Credit as well.
“We’re also doing a targeted case review, so I can add that to the list on Pension Credit.” The targeted case review process entails DWP officials examining a claimant’s entitlement or payments, and also looking at changes to a person’s circumstances that they have not reported. Mr Schofield said that approximately £300million has been allocated to this initiative for the present year, with roughly 4,000 agents looking at cases.
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