DWP says it will review Universal Credit, PIP and other benefit claims

The Department for Work and Pensions (DWP) has published its latest 'Fraud and error in the benefit system' report, detailing the estimated mispayments for the financial year 2024/25 through overpayments or underpayments. It has emerged that claimants were overpaid by an eye-watering £9.5 billion, which is 3.3 per cent of the total benefits expenditure.

This figure has seen a slight dip from the previous year's £9.7 billion, or 3.6 per cent. Meanwhile, the rate of benefit underpayments has stubbornly remained static at £1.2 billion, or 0.4 per cent. Eligibility for DWP benefits hinges on meeting specific criteria, with the amount received varying according to individual circumstances, as reported by the Daily Record.

The DWP said: "Sometimes people tell us the wrong information or do not tell us when their circumstances change. Reporting accurate information and providing evidence may change the amount of benefit people are eligible for and in some circumstances, they may be eligible for more money.

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"However, we cannot calculate the correct amount unless people tell us accurately about their circumstances. This means that people are not eligible for increases in the amount of money they receive until we have the correct information."

DWP fraud and error review for the 2025/26 financial year

The DWP has confirmed that it will be assessing sample cases from six benefits for 'unfulfilled eligibility' throughout the current financial year.

These include:

• Universal Credit
• Housing Benefit (pension age, both passported and non-passported cases)
• Pension Credit
• State Pension
• Personal Independence Payment
• Disability Living Allowance for children

Definitions of Fraud, Claimant Error and Official Error

Fraud

Claims where all three of the following conditions are met:

• the conditions for receipt of benefit, or the rate of benefit in payment, are not being met
• the claimant can reasonably be expected to be aware of the effect on their entitlement
• benefit payment stops or reduces as a result of the claim review

Claimant Error (unfulfilled eligibility)

An overpayment has occurred when the claimant has provided inaccurate or incomplete information, or failed to report a change in their circumstances, but there is no evidence of fraudulent intent on the part of the claimant.

Official Error

The benefit has been incorrectly paid due to a failure to act, a delay or an incorrect assessment by the DWP, a local authority or HM Revenue and Customs (HMRC), to which no one outside of that department has significantly contributed.

The DWP report also emphasised that total spending on benefits rose from £266.2bn in 2023/24 to £292.2bn last year.

This was an increase of £26.0bn (9.8%) which was primarily due to:

• State Pension - spending increasing from £123.9bn to £142.0bn
• Universal Credit spending increasing from £51.9bn to £65.3bn
• Personal Independence Payment (PIP) spending increasing from £21.6bn to £25.8bn

However, the DWP stated that these increases are partially offset by a reduction of £10.2bn (100.0%) in Cost of Living Payments expenditure. The DWP plans to publish the findings for 2025/26 in May of next year.