The Department for Work and Pensions (DWP) mistakenly paid out £850 million in benefits to individuals after their decease. These overpayments occurred when notifications of death were received too late to halt benefit disbursements or when they arrived coinciding with scheduled payments.
Instances of benefit overpayments can also arise if claimants are hospitalized or placed in care facilities where their care is covered by the NHS or a local authority. Payments like Personal Independence Payment (PIP) are typically ceased or put on hold if a person remains in a hospital for 28 days.
The specific categories of overpaid benefits remain undisclosed, although reports suggest a combination of mental health benefits, out-of-work benefits, state pensions, and others. An investigation revealed a total of 2.6 million errors since 2021, with less than half of the £850 million reclaimed.
A spokesman from the DWP emphasized the organization’s commitment to recovering all debts feasibly. They urged individuals who have recently lost a family member to utilize the Tell us Once service for a streamlined notification process to various government services.
The DWP recently acquired enhanced bank account monitoring abilities under the Public Authorities (Fraud, Error and Recovery) Act 2025. This legislation empowers the DWP to compel financial institutions to validate claimants’ eligibility and benefit entitlement by examining bank account details, including savings and overseas spending habits.
Claimants of Universal Credit are typically restricted from holding savings exceeding £16,000, while Pension Credit recipients are limited to four weeks abroad. Notably, the DWP will not have direct access to account log-ins or real-time transaction monitoring.
When potential issues are flagged by banks, the DWP conducts detailed investigations but stresses that benefit decisions are not solely based on bank data. Additionally, the DWP can recover owed amounts directly from claimants’ bank accounts without a court order in certain circumstances.