Official Statistics

May 2019: ESA underpayments: progress on checking

Updated 18 July 2019

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This publication is available at https://www.gov.uk/government/statistics/esa-underpayments-forecast-numbers-affected-forecast-expenditure-and-progress-on-checking/may-2019-esa-underpayments-progress-on-checking

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

Policy background and introduction

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.

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.

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

What you need to know

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

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
  • pensioner premiums

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.

The department became aware of some individual errors on cases in 2013 and revised guidance was issued in 2014 that all cases being converted from previous incapacity benefits must be considered for entitlement to income-related ESA. In 2016, analysis of Fraud and Error National Statistics highlighted the scale of the potential error on historical conversions. The department carried out a sampling exercise on 1,000 cases in the second half of 2017 to help inform the checking process and initial estimates of numbers affected and amounts owed. The department then began work to assess cases in December 2017.

Purpose of publication

This analytical release follows previous publications on ESA underpayments in October 2018 and February 2019.

This publication presents an update, from the department’s management information, of progress on checking potentially affected cases as at 12 May 2019. It includes progress for the exercise as a whole and separately for deceased cases in a number of areas:

  • 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

Results: progress on checking cases

The department expected to complete the majority of the original 320,000 Phase 1 cases identified as potentially affected by April 2019. By 31 March 2019, around 80% of this group had completed the reassessment journey[footnote 1], with the completion rate increasing to around 90% by 12 May 2019[footnote 2].

Phase 1 also includes around 20,000 cases where the claimant has sadly died. These cases take longer to review, with reassessments for this group expected to be completed by the end of 2019. Work has started on the 250,000 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. The previous Minister for Disabled People announced in February 2019 that 30,000 cases that were converted from other incapacity benefits from 2015 onwards would be added to exercise. Reviews of these cases have not yet started, but will begin as Phase 2 cases approach completion.

Table 1 summarises the department’s management information from the whole of the ESA underpayments checking exercise (including work across both phases 1 and 2) at 12 May 2019 compared to the last update from 11 February 2019. Almost two-thirds of the cases to be checked have started the reassessment journey. Nearly half of the potentially affected group had been completed by 12 May. Approximately 86,000 cases have been found entitled to and paid arrears at an average of around £5,000 to date. Around 210,000 cases have been found not entitled either at or before assessment or declined to claim. A total of £456 million in arrears payments had been awarded by 12 May 2019.

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 May 2019 11 February 2019
Number of cases that have started the reassessment journey (see note 6) 390,000 310,000
Number of cases the department has contacted to gather data to review their claims (see note 7) 330,000 270,000
Number of cases that have completed the reassessment journey (see note 8) 296,000 207,000
Number of cases completed the reassessment journey without payment of arrears (see note 9) 222,000[footnote 3] 156,000[footnote 4]
Number of arrears payments made to qualifying cases 74,000[footnote 5] 51,000[footnote 6]
Total amount of historical arrears paid to date £456 million £328 million
Average arrears payment to date £5,000 £6,000

Around 50,000 of the 600,000 cases to be checked are deceased. Table 2 shows that out of this group, more than 10,000 have started the reassessment journey and the department has completed reviews of approximately 7,000 cases. When reviewing cases, the department firstly checks the information held on various departmental administrative systems and only in those cases where we are unable to confirm the previous award of ESA was correct do we attempt to identify and contact next of kin. To date, fewer than 5,000 next of kin have been contacted in order to review cases in this group. The department has assessed nearly 1,000 deceased cases as being entitled to a back payment and have made payments in each of those cases. The average award is around £5,000 and a total of around £5 million in arrears has been paid to this group.

Table 2: progress on checking deceased cases potentially affected by underpayments of ESA on conversion from previous incapacity benefits

Out of the around 50,000 deceased cases to be checked Number
Number of cases that have started the reassessment journey (see note 6) 10,000
Number of next of kin the department has contacted to gather data to review deceased cases (see note 7) <5,000
Number of cases that have completed the reassessment journey (see note 8) 7,000
Number of cases completed the reassessment journey without payment of arrears (see note 9) 6,000
Number of arrears payments made to qualifying cases 1,000
Total amount of historical arrears paid to date £5 million
Average arrears payment to date £5,000

Notes:

  1. Data is reported without detailed verification.

  2. The figures date from 12 May 2019. They are changing rapidly as around 1,200 staff continue to work on the exercise to check potentially affected cases.

  3. The number of cases started the reassessment journey or 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 checking both deceased and non-deceased cases.

  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 45,000 cases, including 5,000 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 are awaiting customer contact 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, and also cases which have been through the full journey to assessment.

  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 as well as cases found not to be entitled at assessment.

  10. The average arrears payment to date reflects a mixture of payments to point of conversion and to 21 October 2014. It is also affected by the prioritisation of cases more likely to have errors, among some of which there is a relatively high prevalence of higher value errors.

  11. Cases paid arrears and completed the reassessment journey include some cases that were reviewed before the decision to pay cases to the date of their conversion, rather than 21 October 2014, and will therefore need to be revisited to assess entitlement in the earlier period.

Source: DWP management information from the ESA underpayment checking exercise at 12 May 2019.

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 – is about having confidence in the people and organisations that publish statistics
  • quality – is about using data and methods that produce statistics
  • value – is about publishing statistics that support society’s needs

The following explains how we have applied the pillars of the Code in a proportionate way.

Trustworthiness

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

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 to ensure accurate representations of the activity undertaken.

Value

This release provides a progress update on the checking exercise following on from the last release on 21 February 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 the next update on 18 July 2019, followed by updates on:

  • 17 October 2019
  • 16 January 2020

Contact information

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 a large number of customers and aim to contact everyone affected by December 2019.

Where to find out more

Footnotes

  1. Some of these cases were reviewed before the decision to pay cases to the date of their conversion, rather than 21 October 2014, and will therefore need to be revisited to assess entitlement in the earlier period. ↩

  2. Completion rates rounded to the nearest 5%. ↩

  3. Revised up by 12,000 on 18 July 2019. See July 2019 publication for further information. ↩

  4. Revised up by 7,000 on 18 July 2019. See July 2019 publication for further information. ↩

  5. Revised down by 12,000 on 18 July 2019. See July 2019 publication for further information. ↩

  6. Revised down by 7,000 on 18 July 2019. See July 2019 publication for further information. ↩

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