DWP by chance pays £500MILLION to lifeless individuals resulting from pension rule – and households face no authorized obligation to provide it again

More than £500million of taxpayers’ money has been handed out to dead people in just five years because of a pension rule – and families do not have to give it back.

A government minister has admitted the scale of mistaken pay-outs over recent years, amid calls for an urgent overhaul of the system. 

The Department for Work and Pensions has doled out £511.8million in state pensions and pension credits since 2019, Parliament has been told in a written answer.

DWP minister Andrew Western was responding to a question from Reform MP Rupert Lowe, who is now demanding changes.

Less than half of the money has been recouped by the government, with only £255million returned and £257million still owing – losses which would be enough to cover scrapped winter fuel payments for up to 1.3million pensioners. 

Mr Lowe, who has been praised his week by X-owning billionaire Elon Musk in contrast to party leader Nigel Farage, described the payouts as ‘a shocking waste’. 

A record high figure of £159million was sent out last year to people who are deceased – and there is no legal obligation on families to return wrongly awarded money. 

The DWP can write to beneficiaries to ask for state pension or pension credit handouts to be returned, but doing so remains optional. 

The Department for Work and Pensions often writes to families asking for the return of wrongly allocated pensions money, though there is no legal obligation to pay back

Work and Pensions Minister Andrew Western has revealed that more than £500million was handed over in pension payments to dead people in the last five years

Mr Lowe’s question submitted for Work and Pensions Secretary Liz Kendall to answer asked if she would ‘make an estimate of the cost to the public purse of pension payments made to deceased recipients in each of the last ten years’.

Mr Western, parliamentary under-secretary for transformation in the DWP, issued the response in which he said only data from the past five financial years could be given.

He insisted that direct payments into the accounts of people who have died represents ‘only around 0.1 per cent of total annual expenditure on pensions’.

Mr Western added: ‘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.’

A total of £458million was overpaid in state pension, with only £233million claimed back to leave a net loss of £225million.

And a further £54million was wrongly doled out in pension credit, with just £22million voluntarily returned and £32million overall missed out on.

People must register loved ones’ deaths within five days of them passing away or a body being found, or else eight days in Scotland – yet a final state pension payment can often include payments for further days afterwards.

Reform UK MP Rupert Lowe, who had asked for the figures, described the overpayments to people who are no longer alive as ‘a shocking waste’

People on the old state pension are given pension credit in advance, though it is paid in arrears to those on the new version – while the state pension is always paid in arrears.

Responding to the newly revealed figures, Mr Lowe told the Telegraph: ‘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.’

Former Liberal Democrats pensions minister Steve Webb, who now works for investment consultancy 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.’