Nearly 600 benefit claimants allowed to keep overpayments of £20,000 or more last year

Nearly 600 benefit claimants overpaid by £20,000 or more last year have been allowed to keep the cash. They pocketed a total of £18.1million - an average of £30,800 each - when administrators decided to write the debts off. Most overpayments were triggered by innocent paperwork errors, but there were 76 cases of claimant fraud where the cheats were allowed to keep a total of £2.7million.

The 587 write-off cases are the worst recorded by the Department of Work and Pensions. The figures mean almost £26million in benefits is being paid out in error or fraud every day. In a Freedom of Information Act response, the DWP also revealed
the biggest outstanding debts it is still pursuing.

It includes one person paying back £521,000 at the rate of £60 a month held back from their Universal Credit payments...meaning it will take them more than 700 years to repay. The claimant cashed in on benefits, including a mistaken industrial injuries disability payment of nearly £300,000. Another, with an even bigger debt of £546,000, is being allowed to pay it back at £130 a month - which means their debt will be cleared in 350 years.

John O'Connell, of the TaxPayers' Alliance, said: "Taxpayers will be appalled cheats and bungling errors are costing billions, with some fraudsters effectively being told they can keep tens of thousands in benefits. Letting people pay off six-figure debts at a few pounds a week, or writing them off entirely, makes a mockery of the system." Last year the DWP wrote off a total of £366million paid out by mistake, a rise of 11% on the £329million lost in the previous 12 months.

The department also decided it was uneconomical to chase up another £6million claimed by fraudsters. Meanwhile, it is trying to track down another person who swindled the DWP out of £491,000 in benefits.

In December 2023, benefits cheat Ali Bana Mohamed, 43, was given three months to return £2million to the DWP or face an additional nine-year prison term on top of the three and a half years he received for committing the crime. He was the mastermind behind a decade-long scam using stolen identities of adults and fake birth certificates of 188 children.

The DWP said a total of £6.5billion was lost to fraud last year and another £2.9billion to errors made by the claimant or officials.

It tries to claw back the money, but in some cases opts to throw in the towel, believing there is no prospect of recovering anything. The DWP said: "We are bringing forward the biggest crackdown in a generation through our Fraud, Error and Recovery Bill. We will save the taxpayer £1.5billion over the next five years, as part of wider plans that will save £9.6 billion by 2030."