DWP crisis as nearly £10BILLION lost to benefit payment fraud and errors

This marks a slight improvement from the 3.3 per cent recorded the previous year and stands as the lowest overpayment rate since the coronavirus pandemic.

Underpayments reached £1.2billion, accounting for 0.4 per cent of spending. The department distributed benefits to roughly 24.3 million people, with overall expenditure climbing to £308.6 billion from £286.6 billion the year before.

After recoveries, the net loss from overpayments stood at £8.6billion. Universal Credit continued to represent the single largest contributor to overpayments in monetary terms, with £6.72billion paid out incorrectly during the financial year.

The overpayment rate for the benefit fell to 8.5 per cent from 9.5 per cent the previous year, though the department noted this reduction was not statistically significant.

Spending on Universal Credit increased substantially from £65.3billion to £79.2billion over the period. Fraudulent claims accounted for £5.42billion of the overpayments, while mistakes by claimants contributed £690 million, and departmental errors added £610million.

Nearly a quarter of all Universal Credit claims contained payment inaccuracies, with 21 in every 100 receiving more than their entitlement.

The main fraud drivers were earnings and employment issues, cohabitation rules, and undeclared capital, together comprising over 60 per cent of fraud-related overpayments.

A DWP spokesperson said: "We are determined to tackle fraud and error in the system, and at just 3.2 per cent the overall rate is at its lowest since the pandemic.

"Our new Fraud Act gives us tough new powers to go after cheats and claw back taxpayers' money - including accessing new data from banks to help find incorrect payments.

"We've also secured a number of high-profile recent convictions of people committing PIP and Universal Credit fraud - proof our sustained efforts are working."

State Pension commanded the largest share of benefit expenditure at £146.1billion, accounting for nearly half of all welfare spending. Despite this enormous outlay, the benefit maintained the lowest overpayment rate across all DWP payments at just 0.2 per cent, equating to £230million.

Underpayments for State Pension reached £390 million, representing 0.3 per cent of expenditure. Errors in National Insurance contribution records remained the primary cause of pensioners receiving less than their entitlement.

Problems stemming from historic Home Responsibilities Protection accounted for six in every ten pounds underpaid due to contribution mistakes.

The Home Responsibilities Protection scheme operated between 1978 and 2010, designed to protect pension entitlements for individuals with caring duties at home.