The Department for Work and Pensions (DWP) is facing sharp criticism for allegedly refusing to acknowledge a systemic administrative error that is leaving some Universal Credit claimants out of pocket by around £110 every month.
Former Minister Highlights Systemic Failure
The issue was brought to light by Sir Steve Webb, the former Pensions Minister who served in the Liberal Democrat and Conservative coalition government. He has responded to concerns raised by readers of the financial publication This is Money, who are anxious about incorrect benefit calculations.
One reader detailed a frustrating experience, stating they had begun paying £200 per month into a personal pension on top of their workplace scheme. Despite correctly reporting these contributions through their Universal Credit online journal, the DWP repeatedly refused to adjust their net income calculation for the benefit award, effectively ignoring the pension payments.
"They have now ignored my request for a mandatory reconsideration of this decision so I will hopefully raise a tribunal claim in due course," the claimant wrote.
A Long-Standing Issue That Won't Go Away
Sir Steve Webb revealed this is not a new problem. "I first wrote about this issue in a column in summer 2024 and we then heard from a number of readers who had all had the same experience," he stated.
After initial contact, the DWP resolved individual cases, leading to hopes the matter was fixed. However, Webb confirmed the problem has persisted. "We have continued to hear from time to time from more people who are still finding that frontline staff simply do not understand the rules," he explained, describing the latest case as "particularly extreme".
Following his intervention on behalf of the reader, the DWP conceded the error. It revised the Universal Credit award, acknowledging the pension contributions should have been deducted all along, resulting in an entitlement to an extra £110 per month. Notably, the claimant reported they had not yet physically received the backdated money at the time of writing.
DWP Response and Promised Improvements
When confronted, a DWP spokesman said: "We have resolved this issue and informed your reader. We have improved guidance for staff to accurately assess Universal Credit entitlement to help prevent this issue happening again."
This statement suggests internal guidance has been updated, but it raises questions about why the error continues to recur and how many other claimants may be affected without the platform to seek expert help. The case underscores the critical importance of:
- Correct assessment of pension contributions in benefit calculations.
- Adequate training for DWP frontline staff on complex rules.
- Effective resolution processes when errors are identified.
The ongoing nature of this problem indicates that, despite assurances, systemic training gaps within the DWP may still be causing significant financial hardship for vulnerable claimants navigating the Universal Credit system.
