DWP PIP claims warning over 'risks' of backdated payments up to £18,000

The DWP says it has rules in place to protect PIP claimants from exploitation if they are due large sums in backpay

The Department for Work and Pensions has clarified the rules for protecting PIP claimants who are owed large amounts of backpay. It comes after fears were raised over vulnerable people being exploited when they are due as much as £18,000 in backdated disability payments.

When someone is awarded Personal Independence Payment, their benefits are backdated to when they first applied. The time it takes to process claims can mean people are due a substantial amount of cash.

Housing providers have raised concerns that this could lead to people taking advantage of vulnerable claimants to get their hands on the money. In response, the DWP has clarified that there are systems in place to help prevent this from happening.

READ MORE:

• October DWP and HMRC money changes for PIP, Universal Credit, ESA and pensioners
• People on PIP could see 'immediate' payment cuts in Labour move to trim benefits

One partnership manager for Homeless Link said: "Concerns were primarily associated with safeguarding risks for clients who were already vulnerable and in receipt of a large sum of money from their backdated Personal Independent Payment (PIP) claims. The issue and concerns were around the length of time it could take to process an application, which could take between six to 18 months, which resulted in applicants receiving large back payments.

"Payments have been reported to range from anything between £6,000 to £18,000, and in some cases have led to applicants who are living in supported housing or have addictions being left at further risk of exploitation and other vulnerabilities."

Homeless Link says PIP claimants may have disabilities or poor mental health that make it difficult for them to understand or manage money. They could also be in danger of being influenced or abused by others.

As a result of the concerns, the DWP has clarified the policy it has on awarding substantial back payments, which has now been included in PIP guidance used by housing providers. The DWP says that if the back payment is £2,000 or more, checks are made for "key indicators of potential vulnerability." These key indicators could include risk of injury; ill-treatment or neglect; past or present domestic, physical or sexual abuse; and modern slavery.

If the amount is £5,000 or more, a call must be made to the claimant (or the person appointed to be in charge of their finances) to ensure they can manage the cash. Multiple attempts are made over 48 hours to speak to the claimant or their representative.

Payment options can include a lump sum, a payment to a third party or staggered amounts paid out over a period of time. If the cash is split into smaller chunks, this has to be agreed with the claimant.

You can get all the latest money, shopping and DWP stories on BirminghamLive's Money Saving Group on WhatsApp. Join our dedicated community for up-to-date news, helpful tips and essential information. You can also get a daily round-up and breaking news updates by signing up to our Money Saving Newsletter with a selection of top stories on benefits, pensions, finances, bills and shopping discounts.