Billions in benefits were not paid out to legitimate claimants last year amid an increase in mistakes by officials, government figures show.
Official figures show the Department for Work and Pensions (DWP) underpaid people claiming benefits by £2billion in 2018-19 - an increase of 17% compared to the previous year.
The biggest cause of underpayments was described as “departmental errors”, with the value of this estimated to be at least £560m – also an increase on previous years, according to the department’s latest accounts.
The DWP said underpayments are a small fraction of overall benefits spending, at just 1.1% of total payments in 2018-19.
The overall rate of “fraud and error” has not increased since 2010, the department said.
But this is unlikely to lessen fears about the impact on those who missed out on legitimate benefits payments – including for Universal Credit.
In a statement the chair of the Public Accounts Committee, Meg Hillier MP, said: ”[We have] long been warning that Universal Credit will be challenging to administer because if the many variables in life. A change of job, hours worked, childcare or housing costs can all have an impact on how much you’re owed.
“The fact that the error rate is so high underlines these concerns. The Government needs to recognise the impact on people and reduce the error rate.
“The impact of an error can be devastating for individuals and families in low incomes.”
Disabled claimants and those unable to work were among those who have lost out on financial support they would otherwise have been entitled to.
In fact the figures show underpayments were highest for the disability benefit Personal Independence Payment (PIP), at 3.8% of its budget.
Emma Williams, who lives with multiple sclerosis and receives PIP, was given a back-payment worth several hundred pounds after a delay in assessing her change of circumstances last year.
Williams, 52, was moved onto PIP from the previous Disability Living Allowance (DLA) in 2016. In the move, an assessment ruled that she no longer qualified for an “enhanced” rate of benefits, a decision she challenged, unsuccessfully, on several occasions.
Williams, from Ashford, Kent, said that once she became too unwell to work last year, it took the DWP four months to process her change in circumstances once she contacted them.
“[Multiple scelorsis] is a progressive illness,” she said. “Things you can do one day, you can’t do the next. But the system did not seem to understand this.
“After I could no longer work, I went to see someone to help me fill in the change in circumstances forms that I’d previously just done myself.
“It was the first time I’d done that and [as a result] the DWP decided that I was due the enhanced rate of PIP and backdated the payment to my last day at work.”
In an assessment of the DWP accounts, the watchdog body the National Audit Office (NAO) said benefits payments were susceptible to “unintended” errors by both claimants and the department, and that the complex benefits system “can cause confusion and genuine error”.
It comes after ministers conceded that the DWP would need to spend close to £1bn correcting historic underpayments to Employment Support Allowance – an out-of-work benefit – claimants over two years.
The DWP said in a statement: “Since 2010 there has been no increase in the rate of fraud and error overall.
“We rely on accurate information and updates from claimants to ensure we provide the right benefits, and are continuously improving this system.
“A minority of people abuse the system and we continue to challenge them using the full range of penalties at our disposal.”