People with disabilities are being blocked receiving compensation after there was an error with benefit payments.
Around 118,000 disability benefit claimants who were not paid their full allowance will not be refunded.
In 2018 an investigation by the National Audit Office (NAO) revealed there was “shoddy administration” by the Department for Work and Pensions (DWP) after thousands of disabled people did not receive their full benefits.
When the mistake went public ministers amended the mistake and vouched to pay those affected by the error.
Ombudsman Rob Behrens is now demanding the DWP to allow people who were not paid their full benefits at the time to be entitled compensation “in recognition of its error” and the “potentially devastating impact it has had on people’s lives”.
Shadow work and pensions secretary Jonathan Ashworth has put pressure on Therese Coffey, the work and pensions secretary, to explain how she intends to “right this wrong”.
The watchdog heard one particular case where a claimant known as ‘Mrs U’, who lives by herself and has multiple health problems, was entitled to Employment and Support Allowance (ESA) when she was moved from Incapacity Benefit.
But due to the DWP’s error her benefits were slashed by almost £80 a week for five days. The cut caused Mrs U’s mental and physical health to deteriorate, her hair fell out and she lost a considerable amount of weight.
Behrens said: “Ms U’s case is deeply distressing and a stark reminder of why accountability and independent Ombudsman schemes matter.
“It is human to make mistakes but not acting to right wrongs is a matter of policy choice. In this case, that choice has been made by the very organisation that is responsible for supporting those most in need.
“We don’t know how many more Ms Us there are out there. That is why I urge the DWP to allow people affected to claim for compensation in recognition of its error and the potentially devastating impact it has had on people’s lives.”
Louise Rubin, head of policy at disability equality charity Scope, said: “This catastrophic error will have left many disabled people and their families struggling to make ends meet [...] It’s only right that the government now ensures all those who missed out can claim compensation.”
Alex Kennedy, head of campaigns and public affairs at Rethink Mental Illness, said: “Those affected deserve compensation and the DWP must be held to account to learn lessons and prevent more people being harmed.”
A DWP spokesperson said: “Our priority is that all people get the financial support to which they are entitled and we have identified those affected by this issue, making 118,000 benefit arrears payments in full.”
The DWP repaid Ms U benefits in full, made an apology and made an additional special payment.
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