Thousands of disabled people could be owed compensation by DWP – here’s why

Z2K's Jamie Thunder explains why DWP's reactive approach to compensation for its own mistakes means many disabled people could be missing out.

In January 2022, the Parliamentary and Health Service Ombudsman published a damning report into failures that meant the Department for Work and Pensions (DWP) had underpaid a disabled woman by nearly £20,000, causing her extreme hardship. 

This situation had occurred when the woman, called Mrs U in the report, had been transferred from Incapacity Benefit to Employment Support Allowance (ESA). When it did this, DWP had wrongly calculated what she was entitled to – meaning her ESA was halved for a period of five years. 

DWP eventually paid this money back to Mrs U. The Ombudsman’s report recommended that DWP also provide Mrs U with additional compensation for the hardship she had endured: a lump sum of £7,500, and interest on the underpaid amount. 

Mrs U is not alone. DWP eventually identified a total of 118,000 disabled people it underpaid for the same reasons that it underpaid Mrs U. The Department says it has now paid all the underpaid benefits, but has refused to act upon the Ombudsman’s recommendation that it should proactively provide any additional compensation. Instead, it has said disabled people are welcome to contact DWP if they feel they experienced hardship due to the underpayments, and DWP will look into each case. 

Put another way, DWP’s position is that failing to pay someone the full income-related benefits they’re entitled to might not cause that person hardship. And if there is no hardship, DWP doesn’t need to do anything more than pay back the benefits that person should have received. The fact that it deprived someone of what was rightfully theirs for years is just one of those things, and DWP shouldn’t face any financial incentive to avoid these mistakes in future. 

Earlier this year, the Shadow Minister for Disabled People Vicky Foxcroft MP asked a series of questions in Parliament about this scandal. The responses have not been informative – but they have been telling. 

She asked how many people have contacted DWP to request additional compensation. The Minister couldn’t say. 

She asked how much DWP has paid in additional compensation. The Minister couldn’t say.  

She asked what proactive steps DWP has taken to let people know they could request additional compensation. The Minister just repeated that people could contact them. 

So not only is DWP not automatically providing compensation, it doesn’t appear to be taking any steps to encourage people to request it. And neither we, nor DWP itself, know how many people have requested it – yet another example of the Department’s ‘wilful ignorance’

Not everyone affected will have experienced the awful level of avoidable hardship that Mrs U did. The idea that her shocking case was unique, however, is laughable. Just as it is doing with its ‘managed migration’ from legacy benefits (including ESA) to Universal Credit, DWP is placing the responsibility on claimants to take action, and trying to wash its hands of the consequences.  

But the consequences are DWP’s to accept. Whether or not it is deliberate, its approach makes it inevitable that some people who suffered because of DWP’s failings won’t get compensation. They might just be relieved at the back-payment landing in their account and not know they can ask for further compensation – certainly DWP doesn’t seem to be letting them know. They might not have evidence of the hardship. And in the years since these errors were first identified, some will sadly have died. 

We all have the right to expect the state to properly support us if we become disabled, or experience poor health. When the state fails us, as it failed 118,000 disabled people in this episode, it should properly recognise that this is a failure, and take responsibility – not just sit and wait for disabled people to contact it. 

If you you’ve been affected by this issue and think you could be due compensation, you should contact your local welfare rights agency. If you live in London, you can get in touch with Z2K, as we may be able to help. Please note that we are a small team with limited capacity, so we cannot take all cases. 

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Jamie Thunder

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