A record £170million in pension payments was made to people after they had died last year, according to figures reported by the Telegraph. The sum is the highest amount paid out erroneously on record.
Over the last five years, £673million was inadvertently paid out to deceased pensioners, of which just £348million has been recovered by the exchequer. Some £240million has been written off as unrecoverable debt.
No legal obligation to repay
Grieving families have no legal obligation to give any money back, so civil servants can only write to them requesting repayment. The overpayments are usually caused by a lag between a person passing away and their family notifying the Department of Work and Pensions (DWP).
Relatives must report a death within five days of a person passing away or body being discovered. A failure to report a death is recorded by DWP as a fraud or claimant error. As it is, DWP has no legal power to recoup money paid out to people who are no longer around to receive it.
Concerns over rising overpayments
Former pensions minister Sir Steve Webb, a Liberal Democrat who served in the Coalition Government under David Cameron, said that taking a heavy-handed approach on the recently bereaved would also go down poorly with the public. He added that the number of overpayments would likely increase as the number of pensioners and rates grow.
Shimeon Lee, a policy analyst at the TaxPayers’ Alliance, said that while the losses are a small share of the overall amount paid to pensioners, they represent a ‘serious weakness’ in the system. A spokesperson for DWP said it was the department’s policy to pursue debt where it is ‘cost-effective’ to recover.
