Rupert Lowe MP Reform
More than half a billion pounds of tax payers’ money has been mistakenly paid to dead people in the last five years.
The Department for Work and Pensions (DWP) has overpaid £512 million in state pensions and pension credit.
A record £159 million was handed out last year alone.
Less than half the money has been reclaimed.
There is no legal obligation on families to hand it back.
The startling figures came to light after Reform MP Rupert Lowe asked a Parliamentary Question.
He was told that £512m was paid to deceased people over the past five years – and just £255m has been returned.
Mr Lowe called for an overhaul of the system.
He said: “This is a shocking waste that underlines the contempt with which the Government treats taxpayers’ money.
“Why is it tolerated?
“Why is the return of this money not enforceable?
“This is wide open to fraud and abuse.
“It needs to be clamped down on as part of a wider Government effort to slash down on misspending.
“We must keep pushing for transparent data to uncover the true extent of the waste.”
The figures show that £458m was overpaid in state pension and just £233m was recovered, leaving £225m outstanding.
Another £54m was wrongly paid in pension credit and only £22m was recouped, with £32m lost.
Andrew Western, DWP parliamentary under-secretary, told the House of Commons:
“Direct Payments made into an account after the death of a customer represent only around 0.1pc of total annual expenditure on pensions.
“Although these are treated as non-recoverable and are not enforceable by law, we can request the money back as a voluntary payment.
“So far, we have recovered around half of the overpayments, to avoid this becoming a long-term cost to the taxpayer.”
Deaths need to be reported within five days – eight in Scotland.
However, a person’s final state pension payment can include payments for days after they died.
Former pensions minister Steve Webb, now a partner at LCP, said:
“With pensions routinely paid four-weekly in arrears, it is common that part of any final payment will cover a period after the person has died, even if the family contact DWP promptly.
“With everything else that the family is dealing with, letters from DWP trying to recover overpayments are unwelcome and should only be sent out if there is a legal basis for them.”
The DWP declined to comment.
