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The Department for Work and Pensions (DWP) provides welfare benefits to approximately 23.7 million individuals, including 13 million on the New or Basic State Pension, with many claiming at least one other DWP benefit.
According to the latest ‘Fraud and error in the benefit system’ report, the DWP’s incorrect payments in the 2024/25 financial year totalled £9.5 billion in overpayments, which is 3.3 per cent of overall benefit spending – showing a slight decrease from the previous year’s £9.7bn (3.6%). Benefit underpayments stayed constant at £1.2bn – 0.4% of the total expenditure.
To be eligible for DWP benefits, claimants must satisfy specific criteria, with the payout depending on their situation, reports the Daily Record.
DWP said: “Sometimes people tell us the wrong information or do not tell us when their circumstances change. Reporting accurate information and providing evidence may change the amount of benefit people are eligible for and, in some circumstances, they may be eligible for more money.”
They added: “However, we cannot calculate the correct amount unless people tell us accurately about their circumstances. This means that people are not eligible for increases in the amount of money they receive until we have the correct information.”
DWP fraud and error review for 2025/26 financial year
The DWP has confirmed that it will be assessing sample cases from six benefits for ‘unfulfilled eligibility’ throughout the current financial year.
These include:
- Housing Benefit (pension age, both passported and non-passported cases)
- State Pension
- Universal Credit
- Personal Independence Payment
- Disability Living Allowance for children
- Pension Credit
Definitions of Fraud, Claimant Error and Official Error
The DWP outlines the three types of fraud and error.
Fraud
Claims where all three of the following conditions are met:
- benefit payment stops or reduces as a result of the claim review
- the claimant can reasonably be expected to be aware of the effect on their entitlement
- the conditions for receipt of benefit, or the rate of benefit in payment, are not being met
Claimant Error (unfulfilled eligibility)
An overpayment has occurred where the claimant has provided inaccurate or incomplete information, or failed to report a change in their circumstances, but there is no evidence of fraudulent intent on the claimant’s part.
Official error
The benefit has been paid wrongly due to a failure to act, a delay or a mistaken assessment by DWP, a local authority or Revenue and Customs (HMRC), to which no one outside of that department has materially contributed. The DWP report also emphasised that total spending on benefits rose from £266.2bn in 2023/24 to £292.2bn last year.
This was an increase of £26.0bn (9.8%) which was mainly due to:
- State Pension – spending increasing from £123.9bn to £142.0bn
- Universal Credit spending increasing from £51.9bn to £65.3bn
- Personal Independence Payment (PIP) spending increasing from £21.6bn to £25.8bn
However, DWP stated those increases are partially offset by a reduction of £10.2bn (100.0%) in Cost of Living Payments expenditure.
DWP plans to release the 2025/26 findings in May next year.
