Department for Work and Pensions

5. Ms D complains the DWP: • failed to advise her of all her options from December 2013 onwards, when her initial entitlement of contribution-based ESA came to an end • failed to cease the payments of her National Insurance Credits (NICs) between 26 December 2013 and 3 March 2020 • failed to appropriately process the ESA claim she made in July 2019 • only calculated the ESA Ms D was entitled to claim from 12 weeks after she claimed, rather than backdating the claim 12 weeks in line with the relevant legislation and guidance.

6. Ms D says due to DWP not informing her she could reapply for ESA when her initial entitlement came to an end, she lost over £20,000 in ESA payments from March 2014 onwards. She also says when DWP completed ICE’s recommendations it should have backdated her entitlement by three months from July 2019, but it calculated it from 12 weeks after this date. This meant the payments she received were limited to six months instead of the full entitlement of 365 days. She says this meant she missed out on a further £2,000 of ESA payments.

7. Ms D would like DWP to improve its services so when ESA entitlement ends after 365 days it informs claimants of their options to reapply after 12 weeks, if they are entitled. She would also like DWP to reimburse her for the ESA payments she believes she should be able to claim between December 2013 and July 2019. Ms D would also like DWP to recalculate her requalification from her application in July 2019 to include backdating the claim 12 weeks.

8. ESA is a government benefit providing financial help and support for people who have a disability or health condition that affects how much they can work. ESA is a contributary and/or income-based allowance. Income related ESA is based on household income and savings. Contribution based ESA, known as ESAC, is based on a person’s NI contribution record.

9. At the end of 2012 the DWP assessed Ms D for entitlement for ESA. She appealed the initial decision as the DWP assessed that she was not entitled to ESA. Following her appeal DWP placed Ms D in the Work-related Activity Group (WRAG). Awards of ESAC for claimants who are in the WRAG have their payments limited to 365 days.

10. In December 2013 the DWP informed Ms D that as it had paid ESAC for 365 days she would not receive any further payments. Following this Ms D’s ESAC continued as a NICs claim only. Once Ms D had reached the time limit of 365 days, financial payments stopped. However, the claim continued so she would receive the Class 1 NICs, which remain valid as long as the person continues to meet the health criteria and has a limited capability for work.

11. NICs are a mandatory tax on earnings paid by employees, employers, and self-employed individuals in the UK. They are used to fund a variety of state benefits and public services, most notably the State Pension and the National Health Service (NHS). NICs only claim means that while you will no longer receive a weekly or monthly payment of the contributory benefit, you will be automatically credited with NICs. The primary benefit of an ESAC continuing as NICs only is that it protects the person’s future entitlement to other benefits, particularly the State Pension.

12. Once the person has passed more than 12 weeks from the ESAC exhaustion date, the claimant could re-qualify for ESAC. To start a new claim and receive payments, the person would need to have worked and paid, or been credited with, enough Class 1 or Class 2 NICs in the two relevant income tax years (RITYs) immediately before they make a new claim.

13. In July 2019 Ms D made a new application for ESAC as she had learnt she could make an application to requalify. In March 2020 the DWP told Ms D that she was not entitled to ESAC payments as she had reached the maximum 365 days. This was because the original claim Ms D made in December 2012 was still open as NICs only.

14. Ms D made a new claim for ESAC in September 2020, which she requested to start from June 2020, the maximum 12 weeks allowed for backdated claims. As a result, the DWP informed Ms D it had closed her NICs claim effective from March 2020. It was necessary to close that claim for DWP to process a new ESAC claim.

15. The DWP decided that Ms D was entitled to ESAC from June 2020 as she satisfied the relevant criteria, including that the RITYs for 2017/18 and 2018/19 showed NICs had been made by her employer continuously since 2012.

16. As a result of this decision Ms D began to receive ESAC payments from October 2020 onwards, including a payment to cover the backdated period from June 2020.

17. In November 2020 Ms D contacted the DWP asking that it considered backdating her ESAC payments to December 2013 as she had been eligible to claim ESAC from that time onwards. Ms D told the DWP that it had given her the wrong information when her payments stopped in December 2013, and she was not aware at the time she could have requalified and applied again after 12 weeks.

18. The DWP would not agree to backdate her new ESA claim back to 2013 when her initial 365-day entitlement ended. Ms D told the DWP she believed it had misadvised her when her initial entitlement ended as the DWP at no point told her that she could requalify for ESAC if she was still paying full NICs. Ms D told the DWP she believed it had a duty to inform her of her options.

19. Following further correspondence, the DWP refused to backdate Ms D’s ESAC as she wanted it to, and she could not resolve the issues she complained about. As such in March 2022 Ms D escalated her complaint to ICE.

20. ICE issued its decision on Ms D’s complaint in June 2023. In relation to Ms D’s complaint that the DWP had misadvised her from December 2013 onwards and did not stop her NICs only claim when she asked it to, ICE told Ms D it could not make a decision as information from 2013 was no longer available.

21. ICE upheld Ms D’s complaint that the DWP failed to properly process her ESAC claim she made in July 2019. As this was the case ICE asked the DWP to calculate the financial loss Ms D suffered because of this failing. It also recommended the DWP make a consolatory payment to Ms D of £500 in recognition of the impact on her.

22. In September 2024 Ms D approached our office via her MP. Ms D told us she was not satisfied with the outcome and wanted us to consider here complaint further.

DWP failed to advise Ms D of all her options from December 2013 and DWP failed to cease the payments of Ms D’s NICs between 26 December 2013 and 3 March 2020 26. Although we have considered these two issues separately we will give the decision together. This is because the same consideration applies.

27. Ms D told us the DWP contacted her to tell her as she had been paid for 365 days she was not eligible for any further payments. She told us: ‘The letter failed to mention that had I paid full NICs for RITYs (the preceding two years) and the necessary fit notes then after 12 weeks I could submit a new claim for ESAC. This despite the fact that ESA legislative changes in 2012 states an undertaking to contact all ESAC claimants before their entitlement ends’.

28. Ms D also told us that she had numerous phone calls with DWP questioning the advice it was providing and was consistently misinformed that she could receive no more ESAC payments. Additionally, she explained DWP failed to cease the payments of NIC’ between December 2013 and March 2020 despite her asking them to on numerous occasions from December 2013 onwards.

29. In relation to these issues ICE said: ‘Whilst I do not dispute that you contacted DWP over the years, without evidence of such calls, I am unable to make a finding that you were misinformed by DWP staff about any potential entitlement to ESAC and on that basis I am unable make a finding’.

30. Unfortunately, in this case the information from the time Ms D’s entitlement to ESAC ended in 2013 is no longer available. We can see that due to this lack of information it would be very difficult to come to a finding in relation to what information or advice DWP gave Ms D at the time. We have not been provided with any documents from the original benefit decision DWP made in 2012 or the notice Ms D received in December 2013 telling her that her entitlement was ending.

31. To establish if a copy of the notice should have been available when we asked DWP to produce it, we considered the DWP’s ‘Managing customer records guidance’. This confirms the DWP should retain any relevant documents for 14 months. This guidance was only in place from May 2018 onwards. The guidance before this date is no longer available. As the notice was issued in December 2013 even if the DWP did still have it when this guidance came into place it should have then disposed of it in line with this guidance.

32. As this is the case we cannot be critical of the DWP for not having the records we need to fully consider this aspect of the complaint.

33. Section 1 of the ‘Social Security Administration Act 1992’ sets out that no person shall be entitled to any benefit unless he makes a claim for it in the manner, and within the time, prescribed in relation to that benefit. In practice, this means DWP could not award Ms D a benefit before she had applied for it. Ms D does not say she applied for any benefit at the time and says that is because the DWP did not inform her she could.

34. Whilst it is the expectation that DWP staff will respond to general enquires and requests for information from potential claimants, it is not their role to provide definitive advice and tell callers what to do. The onus is on the individuals to determine what benefits to claim and when, based on their circumstances.

35. Ms D has told us she had several calls with the DWP in relation to her benefits at the time. Unfortunately, as no recording of those calls exist we have no way of knowing if any advice the DWP gave her on those calls was appropriate. As such we cannot make a decision in relation to what advice or guidance the DWP gave Ms D when she reached the initial 365-day limit in December 2013.

36. Ms D tells us she believes ESA legislative changes in 2012 places a duty on the DWP to contact all ESAC claimants before their entitlement ends. The legislative changes Ms D refers to is the Welfare Reform Act 2012. The main purpose of the Welfare Reform Act 2012 was to simplify the complex welfare system. This included the introduction of Universal Credit and the reform of disability benefits. It also introduced a 12-month time limit on the contributory form of ESA for claimants placed in the WRAG, as Ms D was.

37. The time limiting of ESAC started on 1 May 2012. The DWP did state it would inform all claimants that the time limitation had come into force, this was because prior to this change there was no time limit on claimants. As such the DWP needed to tell claimants that were already on the benefit their entitlement was now limited to 365 days.

38. In Ms D’s circumstances this would not apply. This is because she made her claim in December 2012, after the changes had come into force. As this is the case she would have known from the very start that she would only be able to receive payments for 365 days, so there would be no need for the DWP to contact her to inform her of this.

39. The Welfare Reform Act 2012 did not place a statutory duty on the DWP to inform claimants of all their options when they reached their 365-day limit. Any benefit decisions remained the responsibility of the claimant.

40. As we cannot give a view on any advice the DWP may have given, we cannot make a decision on these issues. As such we will take no further action.

DWP failed to appropriately process the ESC claim Ms D made in July 2019

41. Ms D told us: ‘The ICE report recognised that my 2019 claim should have been processed by the DWP and that they should have cancelled my NICs payments automatically when I submitted the claim without being asked’.

42. The ICE report concluded that the DWP accepted that a claim was made but not processed, as there was a live NICs award at that time which prevented that from happening. ICE found the NICs only claim should not have prevented the ESAC claim from being progressed.

43. From the available evidence, and the admission by the DWP that Ms D made a claim for ESAC in July 2019, it should have awarded her ESCA at that time. The DWP does not dispute that is the case. As the facts of this are not in dispute we do not need to consider this entitlement further.

44. The DWP did not accept this claim as it should have. It was not until Ms D made a further claim in September 2020 that the DWP took the action it should have and processed the claim correctly. As this is the case we agree that this is an indicated failing.

45. In relation to this, ICE recommended the DWP took action to establish the financial loss to make sure Ms D was not financially worse off. It also recommended the DWP made a consolatory payment of £500 in recognition of the impact on Ms D.

46. To consider if this recommendation is enough to put right he impact on Ms D we have considered the DWP guidance ‘Financial redress for maladministration’. This guidance sets out that consolatory payments should usually range from £50 to £500. So, the £500 that Ms D was awarded is at the top of this scale to recognise the significant impact the issue with processing her claim had on her.

47. This is also in line with our ‘Principles for Remedy’ that say: ‘Where maladministration or poor service has led to injustice or hardship, public bodies should try to offer a remedy that returns the complainant to the position they would have been in otherwise. If that is not possible, the remedy should compensate them appropriately’.

48. By agreeing to calculate the financial impact on Ms D and pay her a consolatory payment at the top of its financial remedy guidance we can see the DWP has already done enough to put right the impact of this indicated failing. As this is the case we will take no further action.

DWP only calculated Ms D’s ESA claim from 12 weeks after she claimed, rather than backdating it 12 weeks

49. Ms D told us: ‘The DWP compensated me for 12 weeks after July 2019 thus reducing my compensation payment by a full six months. The recommendation also contradicts the ICE report which states that claims can be backdated by three months’.

50. The ICE report recommended the DWP take action to establish the financial loss that Ms D suffered as a result of their failure to process that claim appropriately, taking into account the previous award should have been closed on or around 16 July 2019

51. We can see that ICE found the DWP should have closed the NIC claim. It gave the DWP a specific date of 16 July to be able to calculate the financial impact on Ms D. Ms D has told us that she believes the way the DWP calculated this is incorrect. This calculation has not been processed as a benefits decision. If that was the case Ms D would have the option to appeal the decision if she did not agree with it.

52. Following the ICE report the DWP have completed the recommended financial calculations as a Loss of Statutory Entitlement (LOSE) payment. This is set out in the DWP ‘Financial redress for maladministration’ guidance that says: ‘A special payment for LOSE can be made if maladministration has caused a claimant to lose entitlement to statutory benefit payments’.

53. From the available evidence we can see when the DWP calculated this payment it considered it as if the DWP closed the previous NICs claim on the date ICE said it should have. We can see from the DWP’s consideration that when it completed the calculations it did so on the assumption that Ms D made repeat claims from 16 July 2019 after each 365-day exhaustion. It then calculated the benefit payments Ms D had received during this time against what she would have received if the DWP had taken the correct action in July 2019.

54. We know Ms D disputes the DWP completed the correct calculations. We can see it made the calculations from the date mentioned in the ICE report, not 12 weeks after this date.

55. The ICE report clearly states that the DWP should have closed the NICs only claim on 16 July 2019. As this is the case the DPW calculated the payment as a linked claim. This means that any new claim is treated as following on from the previous claim. Calculating claims in this way is set out in the DWP guidance ‘Changes to contribution-based Employment and Support Allowance’.

56. As the DWP followed these rules it means it did not need to start the calculation from 12 weeks after the old claim closed, as ICE suggested it should. It would also prevent the DWP from backdating the claim past this date, as there was already a claim in place that would prevent the DWP from going back further. Otherwise, two claims would then both be in place and a person cannot have two ESAC claims open at the same time.

57. The calculations available to us confirm the DWP treated this as a linked claim to the one ICE found the DWP should have closed on 16 July 2019. This calculation meant from 16 July 2019 the DWP had underpaid Ms D by £2,501.13. To take into account that this money should have been paid to Ms D earlier the DWP also calculated a payment of £95.88 to account for inflation since the money was due to Ms D. This along with the £500 consolatory payment meant that DWP was to make a financial payment to Ms D of £3096.01.

58. We can see the DWP followed the relevant guidance and used the linking rule to calculate the amount Ms D had been financially impacted. We can also see that by making the calculations this way it was unable to backdate the calculation any further than it did. As such we have found there are no indications of maladministration in how the DWP calculated the financial impact on Ms D. As this is the case we will take no further action.

59. We are sorry to hear the negative impact these issues have had on Ms D. We hope that by clearly explaining how we have come to our decision it will help Ms D understand why the DWP would not do more than it already has.

1. We have carefully considered Ms D’s complaint about the DWP. We understand Ms D remains dissatisfied with how the DWP dealt with her complaint, and that it misadvised her from 2013 onwards. Ms D feels strongly that the DWP should have informed her what her options were. Ms D told us she is significantly worse off financially because of these issues. We are sorry to hear of the distress this has caused.

2. We have not been able to reach a view in relation to Ms D’s concerns the DWP did not properly advise her she could requalify for Employment and Support Allowance (ESA), and it did not close her previous claim. This is because the evidence is no longer available for us to make a robust decision in relation to these issues.

3. In relation to the DWP not processing Ms D’s ESA claim she made in July 2019, we can see that following an investigation by the Independent Case Examiner (ICE), DWP has taken action to put right the impact of the errors it found. It complied with the ICE’s recommendations which were to apologise and offer Ms D a £500 consolatory payment. ICE also asked the DWP to calculate any financial loss Ms D suffered because of the failing it identified. We have decided DWP has now done enough to put right the impact of these events on Ms D. As DWP has now taken action to put right the mistakes it made, we will take no further action.

4. In relation to how the DWP calculated the financial loss due to the failings identified, we have not seen any indication that the DWP did anything wrong. This is because it completed this calculation in line with the relevant guidance. We fully explain below how we reached our decision in Ms D’s case.