Disability living allowance is paid to two million people of working age

13 July 2012 Last updated at 11:38

About £16m has been wrongly paid to pensioners on disability living allowance and attendance allowance, the Department of Work and Pensions has said.

The DWP says 1,600 people have been overpaid by £20.55 to £131.50 a week.

The mistake has been uncovered by a DWP Accounting Service audit.

Minister for Disabled People Maria Miller says she will “consider carefully” how to recover the overpayments.

In “a small number of cases” such as terminally ill claimants and others considered too vulnerable, the money may not be reclaimed.

It is the second time overpayments have been found in these benefits and the DWP says it is “extremely disappointing” the problem was not solved when it was first discovered in 2007.

When claimants reach state pension age, disability living allowance and attendance allowance are combined into a single weekly payment with state pension and pension credit.

Action was taken in 2007 to end duplicate payments made in error but a scan by DWP accountants discovered they had continued to be made in 1,600 cases.

In a written statement, MS Miller said a monitoring programme had now been put in place “to ensure that there should be no further duplicate payments occurring in the future”.

The statement added: “It is clearly right that these cases should now be corrected.

“However, given the age and disability of the customers affected, we have considered carefully how we carry out recovery.”

She said each case would be considered on an individual basis and customers and claimants contacted to explain the error.

“I will consider making ex-gratia payments in a small number of cases where we consider it inappropriate to withdraw the overprovision of benefit,” added the minister.

“Based on information held by the department, the estimated cost of these payments will be no more than £500,000 in a full year.”