The Department for Work and Pensions (DWP) has come under fire for requesting that bereaved relatives repay state pensions that had mistakenly been sent to the deceased. Although the DWP has no legal authority to reclaim these funds, the department has argued that they do so to uphold public funds. The department says that the cause for over-payment typically occurs due to reporting delays on the death of an individual, or issues with processing delays. Notably, the DWP has paid over £500m in state pension and pension credits to the deceased in the past five years, half of which was recovered from bereaved relatives.
Sir Steve Webb, who is the current partner at pensions consultancy LCP and former Pensions Minister, explained that the letter sent by the DWP does not make it apparent that the repayments are voluntary. Webb’s Freedom of Information request to see the letter further revealed that while the department requests the funds’ return to protect public funds, it does not state that the repayment is voluntary. Webb argues that this ambiguity turns pension repayments into a ‘lottery’, where some people may return the funds, and others may choose not to.
The former minister has called for a consistent approach, urging the government to either secure a legal basis for recovering overpayments or stop benefiting from families that do not understand the system. Radio 4 Money Box listener Dennis said he had been “caught out” by the procedure twice (after the death of both his parents) since the letter did not explain that returning the money was optional. Similarly, another Money Box listener, Jan, received a letter from the DWP stating that she had been overpaid after her husband’s death. Jan stated she had informed the department “immediately” after her husband’s passing, and said the process was confusing and upsetting.
The DWP states that it is not their intention to cause distress, although they have taxpayers’ responsibility to recover overpayments; however, they recognise that it is not always possible. They acknowledge that there is no legal obligation to repay this type of debt and encourage those with concerns to reach out to them directly
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