DWP paid £170m in pensions after recipients died in record year

The Department for Work and Pensions (DWP) paid out £170m in pensions after the recipients had died in a single year, the highest sum on record, according to Metro, which cited the Telegraph.

The figures affect bereaved families, who may receive a letter asking for money back, and taxpayers, who bear the cost of what is not recovered. A DWP spokesperson told Metro it was department policy to pursue debt where it is “cost-effective” to recover.

How the £170m overpayment breaks down

Metro reports that £673m was inadvertently paid to deceased pensioners over the last five years. Of that, £348m has been recovered and about £240m has been written off as unrecoverable debt. Our own arithmetic shows that leaves roughly £85m that is not itemised in Metro’s figures.

The record year alone is about a quarter of the five-year total, and recovery stands at about 52%. Earlier reporting by Chronicle Live put the overpayment at more than £500m over five years, with around half recovered. The sources do not say the two reports cover the same period, so they may not be a like-for-like comparison.

Why state pension overpayment after death happens

Metro says the overpayments are usually caused by a lag between a person dying and their family telling the DWP. Relatives must report a death within five days of the person passing away or the body being discovered. According to Metro, the DWP records a failure to report as fraud or claimant error.

Sir Steve Webb, the former pensions minister, told the PA news agency that pension payments are made four weeks in arrears, so a payment can relate to a period after the recipient’s death. “It’s not a blunder, it’s just a feature of the system,” he said. “The question is, what should happen then?”

Shimeon Lee, a policy analyst at the TaxPayers’ Alliance, told Metro the losses are a small share of total pension spending but represent a “serious weakness” in the system. Sir Steve told Metro he expects overpayments to rise as pensioner numbers and payment rates grow.

Recovering DWP overpayments: what families can do

The DWP has acknowledged there is no legal obligation to repay this type of debt. A spokesperson said: “We acknowledge this is not always possible. Whilst there is no legal obligation to repay a debt of this type, we recognise some people will be willing to repay money to which there was no entitlement.” It is understood the department first tries to recover the money from the bank that received it or from the next of kin. The DWP has said it sends no further letters if nobody replies.

Sir Steve criticised the wording of the letters after a freedom of information request. “Nowhere does it say that this is voluntary,” he said. Anyone who receives such a letter can use the contact details the DWP says it provides, ask whether repayment is voluntary, and report the death promptly to avoid further payments. Broadcaster Paul Lewis has said the DWP admits you do not have to pay it back.

On what happens next, Sir Steve says the law should either make repayment compulsory or the Government should stop asking. Separately, the new Eligibility Verification Measure lets the DWP check bank data on some benefit claims, but the Bill says state pension “cannot be added by regulations”, according to the Express.

Your questions answered

Is State Pension paid in arrears after death?

Sir Steve Webb told PA that pension payments are made four weeks in arrears, so a payment can cover a period after the person has died. Metro reports that overpayments are usually caused by a lag between a death and the family telling the DWP. Relatives are required to report a death within five days.

Is there a time limit on the DWP asking for money back?

None of the sources give a time limit, so we cannot say. The DWP says there is no legal obligation to repay a debt of this type, and that it can ask for the money back. For a specific case, call the number on the DWP letter and ask the department to explain how it calculated the amount.