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04 November 2022
Ciara Lawrence;
POST OFFICE HORIZON SCANDAL: APPLYING A
BENEFITS DISREGARD FOR ALL POST OFFICE
COMPENSATION SCHEMES
Issue
1. There are multiple compensation schemes for postmasters related toPost Office and the
Horizon scandal. Postmasters receiving compensationmay lose their eligibility to claim
means-tested benefits due to capital limit rules.
Recommendation
2. You agree that we should pursue a full benefits disregard for recipients of compensation
across all schemes.
3. You agree that the attached letter should be sent to the Minister forEmployment to
emphasise the importance of moving quickly to deliver this legislation given the hardship
faced by postmasters and the current economic climate.
Background
4. The Post Office Horizon IT scandal saw hundreds of postmasters prosecuted by the Post
Office between 2000-2014. A Group Litigation Order brought by555 postmasters was
settled in December 2019. Since that point83 related convictions have been quashed
and 2,400 postmasters have made claims for Horizon-related shortfallsThere are various
compensation streams being run for those affected by Post Office and Horizon.
5. We have been working with DWP to set up a benefits disregard for Post Office and
Horizon-related compensation schemes Applying a disregard would mean that receiving
compensation would not affect claimants eligibility for DWP-administered means-tested
benefits and pension credits. Thiswould be consistent with the approach taken for the
Windrush and Infected Bloodcompensation schemes.
6. Ordinarily, having capital over £16,000 would render a claimant ineligible to receive
means-tested working age benefitsand would also reduce pension credit entitlement
Many postmasters will getcompensation above this amountand would therefore have
any means-tested benefits or pension credits significantly reduced.
7. Applying a disregard would mean that compensation would not affeca claimant's
eligibility to apply for these means-tested benefits and pension credits.
Considerations
8. Applying a benefits disregard wouldrequire secondary legislation. The disregard would
not apply retrospectively, but once the legislation comes in, claimants (including those
whose compensation predates the legislation) will be eligible toclaim for DWP means-
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tested benefits and pension credits from that point onwards. This means thathe many
claimants who have already received compensation whicHakes them over the £16,000
capital limit or who will do so before the legislation comes into force will lose their benefits
eligibility until the legislation is in place.
9. DWP’s preference, which we support, is to design legislation that captures all Post Office
and Horizon-related compensationschemes, including schemes which have notbeen
announced publicly yet. The same treatment would therefore be applied to all
postmasters receiving compensation from the moment the legislation is in place, ensuring
fair treatment and parity across theschemes.
10.We recommend extending the disregard for next of kin where the claimant is deceased,
so that inherited compensation would not affect the individuaé own benefits eligibility.
This is in line with benefits treatment for the Windrush and Infected Blood schemes.
11.As this disregard would only apply to DWP-administered benefits, we wilvork with
DLUHC to mirror this disregardacross council tax support schemes The legislation to put
the disregard in placewould need to be replicated in Northern Ireland, but we understand
that this is usual practice and should not hold up the process.
12.As many postmasters have already received compensation andherefore may currently
be ineligible for benefits, we should progress this work agjuickly as possible. Passing
legislation of this type usually takes 6-12 months. We are, however, keen to expedite the
process given the financial hardship many claimants are facing. Giveithe current
economic climate and the high level of scrutiny Government is facing on treatment of
postmasters, we would recommend that you write to the Ministefor Employmentto
encourage him to pass this legislation as quickly as possible, and have included a draft
letter as Annex A.
Presentation and handling
13.Message: this is part of Governments work to ensure fair compensation for the
postmasters whose lives were so badly affected by the Horizon scandallt sits alongside
our desire to find outjust what went wrong, through Sir Wyn Williamés statutory inquiry.
14.We expect that announcing a benefits disregard will be positively received by
postmasters and should also reassure parliamentarians campaigning on this issue that
we are taking pro-active steps to avoid inadverterly reducing claimants’ benefits and
pension credit eligibility through compensation lump sumsalthough there is likely to be
pressure to get the legislation in place as quickly as possible We will prepare lines on
this.
15.Applying a disregard would be in line with equivalent disregards for the Infected Blood
and Windrush schemes. If we do not apply a similar disregard here, we will be open to
criticism for not taking steps to ease the financial burden on claimants.
16.We will work with DWP and Post Office toschedule the announcement, which we hope
to make in Parliament ahead ofthe next Horizon Inquiry Compensation hearing on 8
December.
Annexes
17. Annex A: Draft letter to the Minister forEemployment (copied below).
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Guy Opperman MP, Minister for Employment,
Department for Work and Pensions
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November 2022
Dear Guy,
BENEFITS DISREGARD FOR POST OFFICE COMPENSATION SCHEMES
I am writing to seek your support for granting a benefits disregard for postmasters who are
recipients of Post Office and Horizon-related compensation, in line with the disregards
which are already in place for the Windrush Scheme and Infected Blood Scheme.
I understand that you are due to receive advice on this matter from your officials and would
encourage you to grant this disregard in full.
As I am sure you are aware, it is impossible to ignore the negative impact that the Horizon
scandal and the related court proceedings have had on affected postmasters' lives: on
their livelihoods, their financial situations, their reputations and, for some, their physical
and mental health. To date, 83 postmasters have already had their Horizon-related
convictions overturned. Post Office has also been making progress at pace on the
Historical Shortfall Scheme, with 2,125 claimants (90% of eligible claims) under the
scheme having now received offers. Government also announced additional compensation
this year for postmasters who brought the High Court litigation against the Post Office,
which was settled in 2019 after many years of legal proceedings, given these postmasters
were left financially worse off than their peers.
The impact that the Horizon scandal has had on the lives of affected postmasters and their
families cannot be overstated. The affected postmasters are extremely vulnerable and
have suffered what is described as the “biggest miscarriage of justice” in British legal
history, resulting in significant financial hardship, including bankruptcy for some. A benefits
disregard would ensure compassionate and fair treatment of postmasters and provide
additional comfort to those who are struggling with financial hardship.
Compensation cannot take away the suffering that affected postmasters have experienced.
But we are determined to ensure that each eligible person gets what is due to them. We
must now ensure that outstanding issues around benefits do not prolong the impacts of the
Horizon dispute on these postmasters by affecting their eligibility to apply for benefits as
needed. If we do not act, many postmasters may end up losing benefits as a result of
receiving compensation. This is why I would be grateful if you could consider deploying
any tools at your disposal to expedite the passing of the necessary legislation, which will
allow postmasters to access benefits and pension credits, as needed, as soon as
possible.
I hope that you agree this approach to be appropriate and in our shared interest. I look
forward to working with you on this important matter.
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Yours sincerely,
Kevin Hollinrake MP,
Parliamentary Under Secretary of State
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