Grieving families being 'scammed' by 'heartless' government pension threats

Ministers have been accused of a “heartless scam operation” that frightens bereaved people into bolstering the Department for Work and Pensions’ coffers. The DWP has been writing to families informing them they need to return state pension payments allegedly made in error.

These direct payment after death (DPAD) overpayments happen if the DWP is not notified of the death in time to stop a payment. Though these are treated as non-recoverable and are not actually enforceable by law. The DWP can request the money back as a voluntary payment.

But Dennis Reed, director of over-60s campaign group Silver voices, warned this is an “official scamming exercise to frighten the recently bereaved into bolstering the DWP coffers”. He said: "This a scandalous DWP policy, using the dates of death certificates to try and screw a couple of weeks' pension payments from grieving relatives, at a time when funeral costs are soaring. Because there is no legal liability on relatives to repay part of a monthly pension, this is a heartless scam operation which must be stopped immediately. Silver Voices calls on the DWP to ensure that this policy is scrapped. "

Sir Steve, who now is a partner at pension consultants LCP, previously sent a freedom of information request (FOI) to receive a copy of the letter that gets sent to reclaim overpayments.

He said: “Nowhere does it say that this is voluntary."

The letter has a frequently asked questions (FAQ) section but none of the questions in it are "do I have to do this?", Sir Steve noted.

He added: "And the result, I fear, is that it’s a lottery, and the losers of the lottery are people who are intimidated or frightened or upset by a letter. You know, they’ve just been bereaved.

"They get a letter from the Government demanding hundreds of pounds back, and they just send it because they think they have to.

"They don’t want, you know, they perhaps fear a knock at the door kind of thing, whereas other people, who perhaps are aware they don’t have to pay it back or just choose not to, don’t."

Either the law should state that everyone is obligated to pay the money back or the Government should stop requesting repayments altogether, Sir Steve explained.

He said: "This kind of halfway house of … we know that it’s not mandatory when we send the letters, but we’re not going to tell you...that doesn’t seem right to me."

The DWP acknowledged that there is no legal obligation to repay such overpayments but said it has a responsibility to attempt to recover the funds.

Pensioner Phil Ellaway, 68, accused the department of "scamming" vulnerable people after he received a letter following his wife's death in October aged 66.

The DWP had claimed that they incorrectly paid £537.20.

Phil said: "My initial reaction was, by the tone of the letter, I had done something wrong or illegal."

He contacted the department who failed to tell him why their debt centre had been in touch with him despite no previous communication.

Phil was told the letter is only sent once and there is no liability to pay the money.

But he accused the DWP of "preying" on bereaved people who were grieving, adding: "I am disgusted that these people are doing this to families who are at a low ebb."

A DWP spokesman said: "It is not our intention to cause distress, however, we have a responsibility to taxpayers to recover overpayments. We acknowledge this is not always possible.

"Whilst there is no legal obligation to repay a debt of this type, we recognise some people will be willing to repay money to which there was no entitlement. We provide full contact details and encourage anyone with concerns to call us."

It is understood that no further letters are issued requesting payment if the DWP does not receive a response and that an initial recovery is attempted from the bank where the payment was made or from the deceased’s next of kin.