6. ESA is a benefit paid to people who have limited capability to work. There are two main types: contributory (based on national insurance contributions), and income-related (means-tested) paid on its own or as a top up to contributory ESA. In 2011 DWP began reassessing people who had been getting other benefits including incapacity benefit, and transferring those eligible to ESA. DWP accepted that it underpaid many people whom it transferred because it paid them ESA which was only based on their national insurance contributions when they should have received income-related ESA too.
7. According to a National Audit Office March 2018 report, the average underpayment was likely to be around £5,000 and was ‘most likely to affect those with the most limiting illnesses or disabilities’. It said DWP had been legally obliged ‘to check people’s entitlement to both incomerelated ESA and contribution-related ESA, but in practice the Department did not always do this’.
8. According to August 2018 DWP internal guidance, DWP accepted ESA was ‘a single benefit’ and a decision maker was ‘required to consider entitlement to both elements…when making a conversion decision and to gather information about the claimant’s financial circumstances’. It accepted that the failure to do so was an official error. The guidance said DWP’s Legal Entitlements and Administrative Practices (LEAP) exercise would review conversion decisions where no evidence about the claimant’s financial circumstances was requested before it made a decision. It would ask claimant for such information and where appropriate pay arrears of income-related ESA.