DWP writes off 645,000 benefit overpayments worth nearly £12million

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Separate DWP data has shown that claimants received almost £10billion more than they were entitled to

Hundreds of thousands of benefit overpayments have quietly been abandoned by the Government over the past five years.

The losses amount to nearly £12million of taxpayer money that will never be recovered.

The Department for Work and Pensions wrote off 645,488 overpayments since 2021-22 because the sums involved were too small to justify pursuing, according to figures obtained through freedom of information laws.

Each debt was valued at under £65, with the typical error averaging just £18.50. The DWP deemed the recovery process for amounts of this size not "cost-effective".

On average, more than £2.3million was lost each year to these minor errors. The written-off debts also included cases where recovery efforts had initially begun but were later abandoned because continued pursuit was considered too expensive.

Helen Whately, the shadow work and pensions secretary, described the scale of the write-offs as "staggering". She accused the Government of simply not being "bothered" to reclaim the funds.

"Working people who pay their taxes in full, every time, will rightly ask why their money is disappearing into the hands of people who aren't entitled to it," Ms Whately said.

The criticism comes against a backdrop of significant overpayment problems across the benefits system.

Separate DWP data has shown that claimants received almost £10billion more than they were entitled to in the most recent financial year as a result of fraud and error.

That headline figure is understood not to account for the smaller debts now being written off, meaning the true cost of mistakes in the system is even greater.

John O'Connell, chief executive of the Taxpayers' Alliance, said taxpayers would be "furious" at the scale of the problem.

"Recovering small sums must be proportionate, but hundreds of thousands of write-offs point to a system haemorrhaging taxpayers' cash," Mr O'Connell said.

"Ministers need to prevent overpayments in the first place and get a grip on Britain's ballooning benefits bill."

James Price, a senior fellow at the Adam Smith Institute, went further, calling the write-offs "eye-watering" and a symptom of "broader administrative failure" at the DWP.

"Britain's benefits system is now so broken that it produces more than 600,000 errors that are apparently too small to be worth recovering," Mr Price said.

He blamed a combination of poor administrative oversight, outdated technology and "bureaucratic lethargy" for a system that "cannot even function properly".

The DWP defended its approach, with a spokesman saying: "In the last year alone, we recovered nearly £3bn of taxpayers' money, while continuing to strengthen our measures to prevent overpayments such as fraud occurring in the first place, including through enhanced checks."

The department maintained it had "an important duty to the taxpayer to recover overpayments where it is cost effective, allowing resource to focus on recovering higher-value debts".

The Government is believed to have spent £333billion on welfare in 2025-26. More than half of that sum went towards pensions, with the remainder funding working-age benefits, children's welfare and support for disabled people.

That total welfare bill is expected to surge to £400billion by the end of the decade, intensifying pressure on ministers to demonstrate they can manage public spending effectively.