The Department for Work and Pensions (DWP) has confirmed that it is issuing refunds to 197 benefits claimants who were incorrectly charged Administrative Penalties, commonly known as 'Ad Pens', between 2023 and 2025. The refunds will range from £350 to £5,000, and the DWP has already begun contacting affected customers.
Why the refunds are being issued
Administrative Penalties are charged to claimants suspected of benefit fraud as an alternative to criminal prosecution. They are applied when there is a 'realistic prospect of conviction'. However, a DWP spokesperson said: “In an effort to identify opportunities for improvement, we proactively reviewed our use of Administrative Penalties and identified a small number of cases where they were incorrectly applied.
“We have put this right by removing and refunding those penalties, contacting affected customers, and strengthening our processes to ensure decisions are made consistently and appropriately in future.”
How many penalties were issued and rescinded
According to DWP data, 567 Ad Pens were issued in 2023-24, of which 128 were later rescinded. In 2024-25, 272 Ad Pens were issued, and 69 have been rescinded so far. The department credits its counter fraud and compliance function with generating £1.8bn of savings in 2025-26.
Claimants will receive communication from the DWP about the refunds before payment is made.
Impact on Loss of Benefit penalties
Where a claimant accepts an Ad Pen and continues to be eligible for benefit, the DWP typically removes the additional penalty of Loss of Benefit. This means that Loss of Benefit penalties will now be reserved for cases that result in a conviction, and in such cases, the penalty can extend for up to 3 years for the most serious offences.
If an Ad Pen is not accepted, whether for benefit or non-benefit payment fraud, the DWP will refer the case to the Crown Prosecution Service, or in Scotland, the Crown Office and Procurator Fiscal Service, for prosecution, as is currently the practice.
