More than 8 million households received the £650 means-tested cost of living payment last year as part of the UK Government’s £37billion financial support package. The payments were made automatically in two instalments, the first for £326 and the second for £324.
The money was paid to eligible claimants in receipt of Universal Credit, Income-based Jobseekers Allowance, Income-related Employment and Support Allowance, Income Support, Working Tax Credit, Child Tax Credit and Pension Credit. However, according to statistics from the recently published ‘Fraud and Error in the benefits system’ report, an estimated £330million of cost of living payments were overpaid to people incorrectly receiving Universal Credit and could see those affected having to pay the money back to DWP.
The total expenditure on cost of living payments was £8.4bn in the financial year ending (FYE) in April 2023. The report explains that estimates have been produced by “assuming that fraud and error could only occur when claimants were incorrectly receiving the qualifying benefit”.
It continues: “In this situation, the claimant does not have entitlement to the qualifying benefit, and they are overpaid the full amount of the cost of living payments. This methodology means that no underpayments were estimated on cost of living payments for FYE 2023.”
The cost of living payments overpayment rate was 4.9 per cent (£410m) in FYE 2023. Overpayments due to fraud were 3.7 per cent (£310m) in FYE 2023. Overpayments due to claimant error and official error were estimated at 0.8 per cent (£60m) and 0.5 per cent (£40m) respectively.
The report states: “Overpayments relating to incorrectly paid low-income benefits accounted for around £9 in every £10 overpaid on cost of living payments, at 4.6 per cent (£380m) in FYE 2023. This was mostly due to 3.9 per cent (£330m) of cost of living payments expenditure being overpaid to claimants incorrectly receiving Universal Credit.” It's important to note the report only measures benefits delivered by DWP.
Over the 2023/24 financial year DWP will deliver a £900 payment to those on means-tested benefits. This is being made in three instalments - £301, £300 and £299. The first payment of £301 was made to more than 8 million eligible households between April 25 and May 17, 2023.
The next round of cost of living support is for 6 million people on qualifying disability benefits, the payment window is between June 20 and July 4 - find out more here.
On the official cost of living page on GOV.UK it states: "if you receive a Disability Cost of Living Payment, but we later find that you were not eligible for it, you may have to pay it back”.
You can read the full Fraud and Error report on GOV.UK here.
To keep up to date with the latest cost of living news, join our Money Saving Scotland Facebook page here, follow us on Twitter @Record_Money, or subscribe to our newsletter which goes out Monday to Friday - sign up here.
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