Official Statistics

January 2020: ESA underpayments: Forecast numbers affected, forecast expenditure and progress on checking

Updated 3 August 2020

The final release of these statistics can be found in the ESA underpayments collection.

Policy background and introduction

1. Employment and Support Allowance (ESA) was introduced in October 2008 for people who have limited capability to work because they are disabled or ill. From March 2011 the Department for Work and Pensions (DWP) began reassessing people on incapacity benefits (for example, Incapacity Benefit and Severe Disablement Allowance) for eligibility for ESA.

2. More than 2 million claimants were receiving incapacity benefits before reassessment began and we have now reassessed around 1.5 million people, nearly all of those who required a reassessment.

3. The department is correcting some past underpayments of ESA, which arose while reassessing incapacity benefit claims.

What you need to know

4. There are 2 main types of ESA:

• contributory, which is based on National Insurance contributions
• income-related, which is a means-tested benefit – income-related ESA can be paid on its own or as a top-up to contributory ESA

5. Extra payments, called premiums, are available only to qualifying customers who are eligible for income-related benefits. These include the Enhanced Disability, Severe Disability, Carer, and Pensioner Premiums.

6. Largely between January 2011 and October 2014 some people receiving Incapacity Benefit and Severe Disablement Allowance had their claims converted to contributory ESA. However, the possibility of whether they may also have been entitled to income-related ESA was not considered for all cases. This means they may have missed out on the payment of premiums, such as the Enhanced Disability Premium.

7. The department announced it would be undertaking an exercise to review cases to check entitlement for income-related ESA in December 2017, with work on the exercise commencing that month.

Purpose of publication

8. This analytical release follows previous publications on ESA underpayments in 2018 and 2019. This publication presents an update, from the department’s management information, of the progress on checking potentially affected cases as at 12 January 2020. It includes progress in a number of areas for the exercise as a whole and separately for cases where the claimant has died:

• the number of cases which have started the reassessment journey
• number of cases contacted to date
• number of cases completed to date
• number of cases found not to be due arrears payments to date
• number of cases found to be due arrears payments to date
• the total amount of historical arrears the department has paid out in correcting these cases
• average arrears payment to date

Progress on checking cases

9. Table 1 summarises the department’s management information from the whole of the ESA underpayments checking exercise at 12 January 2020 compared to the last update from 13 October 2019. The table includes work across the:

• original Phase 1 cases identified as potentially affected
• Phase 2 cases which came into scope following the Secretary of State’s announcement in July 2018 to pay all cases back to the point of conversion
• 30,000 cases in Phase 3 that were converted from previous incapacity benefits into the Support Group from 2015 onwards

10. Since the last publication, focus in the exercise has been on processing cases where claimants have died as well as cases in Phases 2 and 3. Since 13 October 2019:

• all 600,000 cases involved in the exercise have started the reassessment journey
• around 70,000 additional cases have completed the reassessment journey, bringing processing of the potentially affected group across all 3 phases to around 97% complete^{[footnote 1]} overall
• the average arrears payment has reduced, reflecting the shorter durations of the cases processed over the quarter. The arrears payments of cases in Phases 2 and 3, as well as cases where the claimant has died, span shorter periods than other cases in Phase 1

11. The government committed to complete the original 320,000 Phase 1 cases as well as the additional 250,000 Phase 2 cases (see paragraph 9 above) by the end of 2019. As of 12 January, 98% of the cases in Phases 1 and 2 had been completed.

Table 1: Progress on checking cases potentially affected by underpayments of ESA on conversion from previous incapacity benefits

Out of the 600,000 cases to be checked:	12 January 2020	13 October 2019
Number of cases that have started the reassessment journey (see note 6)	600,000	570,000
Number of cases the department has contacted to gather data to review their claims (see note 7)	520,000	490,000
Number of cases that have completed the reassessment journey (see note 8)	581,000	510,000
Number of cases completed the reassessment journey without payment of arrears (see note 9)	468,000	410,000
Number of cases qualifying for arrears payments	112,000	100,000
Total amount of historical arrears paid to date	£589 million	£552 million
Average arrears payment to date	£5,000	£6,000

12. Around 50,000 of the 600,000 cases to be checked are where the claimant is deceased. Table 2 shows that out of this group, around 83% have completed the reassessment journey. Cases where the claimant has died take longer to process due to challenges in identifying and contacting the next of kin and obtaining information on which to assess entitlement. Where we have been unable to identify the appropriate representative or next of kin, we are working with the General Register Office for England and Wales and National Records of Scotland to gather information in relation to who registered the death, to help us obtain the relevant information needed. As in table 1, the reduction in the average arrears payment, on cases where the claimant has died, reflects the shorter durations of the cases that have been the focus of checking work over the last quarter.

Table 2: Progress on checking cases where the claimant is deceased and potentially affected by underpayments of ESA on conversion from previous incapacity benefits

Out of the around 50,000 cases to be checked where the claimant is deceased:	12 January 2020	13 October 2019
Number of cases that have started the reassessment journey (see note 6)	50,000	50,000
Number of next of kin the department has contacted to gather data to review cases (see note 7)	20,000	10,000
Number of cases that have completed the reassessment journey (see note 8)	44,000	32,000
Number of cases completed the reassessment journey without payment of arrears (see note 9)	39,000	30,000
Number of cases qualifying for arrears payments	5,000	1,000
Total amount of historical arrears paid to date	£16 million	£7 million
Average arrears payment to date	£3,000	£5,000

Notes to tables 1 and 2:

1. Data is reported without detailed verification.

2. The figures date from 12 January 2020. We expect these figures to continue to change as staff continue to work on the exercise to check potentially affected cases.

3. The numbers of cases that have started the reassessment journey or have been contacted is rounded to the nearest 10,000; the number of cases completed is rounded to the nearest 1,000; the total amount of historical arrears paid is rounded to the nearest £1 million and the average arrears payment is rounded to the nearest £1,000.

4. Figures may not sum due to rounding.

5. Table 1 shows progress on the exercise as a whole, including both cases where the claimant has died and where they are still alive.

6. Starting the reassessment journey includes checking information held on various departmental administrative systems to identify which cases needed to be contacted or contacting cases with a high risk of underpayment without conducting prior checks.

7. Around 76,000 cases, including approximately 27,000 cases where the claimant has died, have been identified as not entitled during checks of DWP administrative systems prior to making contact, and consequently have not been contacted. Further cases, where the claimant is deceased, are waiting for DWP to contact next of kin following initial checks.

8. Completing the reassessment journey includes cases identified on DWP administrative systems as not entitled or who have identified themselves as not entitled prior to assessment, or who have not responded to multiple attempts to contact by phone or post over an 8-week period and also cases which have been through the full journey to assessment. If people who have not responded do get in touch in future, their case will be actioned.

9. Completing the reassessment journey without payment of arrears includes cases identified on DWP administrative systems as not entitled, or who have identified themselves as not entitled prior to assessment, or who have not responded to multiple attempts to contact by phone or post over an 8-week period as well as cases found not to be entitled at assessment. If people who have not responded do get in touch in future, their case will be actioned.

Source: DWP management information from the ESA underpayment checking exercise at 12 January 2020.

Statement of Compliance with the Code of Practice for Statistics

The Code of Practice for Statistics (the Code) is built around 3 main concepts, or pillars: Trustworthiness, Quality and Value. The following explains how we have applied the pillars of the Code in a proportionate way.

Trustworthiness – is about having confidence in the people and organisations that publish statistics

Progress on the ESA underpayments checking exercise is based upon DWP management information, supplied via a data capture tool built to allow consistent and efficient recording of case review progress in the ESA Underpayments checking exercise.

Quality – is about using data and methods that produce assured statistics

The data presented on checking progress is from the data capture tool developed to accurately record progress and levels of arrears payments. Drop down menus and built-in validation checks assist in reliable data recording. Data recording checks are carried out by operational staff. Small samples of figures have been cross-checked across jobcentres. The department’s analysts have challenged some figures and definitions to ensure accurate representations of the activity undertaken.

Value – is about publishing statistics that support society’s needs for information

This release provides a progress update on the checking exercise following on from the last release on 17 October 2019, together with context for those figures.

In addition, it aims to reduce the administrative burden of answering Parliamentary Questions, Freedom of Information requests and ad hoc queries to ensure timely responses to public queries.

To support financial planning and management of departmental business, figures have been seen in advance by Ministers and officials, as pre-release access restrictions do not apply for management information.

The department intends to release a final update of progress on checking cases in Spring 2020, as part of the completion of the exercise. The publication date will be pre-announced at least 4 weeks in advance in the statistics release calendar.

Contact information

For media enquiries, contact DWP Press Office, telephone: 0203 267 5144

The department will be contacting all those identified as potentially impacted to get the information we need to look again at ESA claims. We have already contacted the majority of customers. For enquiries contact, telephone: 0800 169 0346

Where to find out more

• National Audit Office (NAO) published a report on their investigation into errors in ESA on 21 March 2018

• Public Accounts Committee (PAC) hearing based on the NAO report on 21 May 2018

• The PAC report was published on 18 July 2018

• The department’s response to the PAC report was published on 9 October 2018

• Previous statistical releases published in 2018 and 2019: ESA underpayments: forecast numbers affected, forecast expenditure and progress on checking

• Written Statements were tabled on 14 December 2017, 15 March 2018, 18 July 2018, 17 October 2018, 21 February 2019

• DWP Benefit expenditure tables

• ESA underpayments frequently asked questions lodged in the Houses of Parliament library on 18 July 2019

1. Completion rates rounded to the nearest 1% ↩