Pensioners may have to repay benefits

Thousands of pensioners may have to repay some benefits following overpayment blunders by the government, it emerged today.

Overpayments of pension credit and income support for pensioners on low incomes have trebled in just four years, from £40m in 2001-02 to £130m in 2004-05, according to figures obtained by the Conservative party.

Overpayments now represent 2.1% of the total benefits paid to older people.

Conservative welfare reform spokesman David Ruffley, who obtained the figures, said they showed ministers were running the pension credit system "incompetently".

Mr Ruffley said: "Pensioners face the prospect of being rung up by the Department for Work and Pensions asking for its money back.

"The government needs to explain why overpayments have trebled and give reassurances to affected pensioners that they will not be harassed and treated insensitively by government officials."

The DWP said the rise in overpayments occurred after it recruited 3,900 new staff with no knowledge or experience of the benefits system.

Benefits minister James Plaskitt said checks had been introduced to prevent benefit errors, and improvements were expected over time.

The Treasury's efforts to claw back overpaid tax credits have proved controversial in recent years, as poor families were forced into financial hardship by unexpected demands for the return of money they had already spent.

DWP rules on overpayments state that money cannot be demanded back if it was paid out due to official error.

But if the payment was the result of incorrect information given - even inadvertently - by the claimant, recipients would have to repay funds.

Official guidance states that repayment can be waived "if it would cause hardship - but hardship must not be confused with inconvenience".

A spokeswoman for Age Concern urged the government to "exercise a common-sense approach" to overpayment as pension credit was a lifeline for thousands of older people on low fixed incomes.