NHS pays out millions to the dead in pensions blunder

Bungling NHS chiefs have wrongly dished out close to £2 million in pension payouts to the dead.

A Sunday Post probe has revealed there were more than 5,300 pension overpayments between May 2010 and August 2013 by the Scottish Public Payments Agency, the body that oversees NHS pensions. The gaffes are being blamed on internal NHS system errors, fraud and former staff moving abroad.

But critics said this was not good enough and described the payments as a “huge waste of money”.

Matthew Sinclair, of the TaxPayers’ Alliance, said: “The public sector pay bill is costly enough already without taxpayers picking up the tab for staff who have passed away. It’s vital the authorities come clean over just how much money has been lost so that taxpayers can judge how they are really performing in cutting waste.”

The SPPA managed to claw back almost £1.7m of the £1.9m that had been handed out by mistake. But £205,564 has been written off by the body, with a further £26,961 still outstanding enough, in total, to pay for eight full-time nurses.

The revelations come only months after we revealed how NHS officials in England had forked out £30m in pensions over the past decade to former employees who had died.

We asked for figures in Scotland but were told it was only possible from May 2010, when it brought in a new accounting system. The admission has sparked concerns that the overpayments could be the tip of the iceberg.

Normally, relatives would inform SPPA of the death of a retired worker who is receiving a pension though there is no legal obligation for them to do so. The agency is also informed when a pension payment is rejected by a bank because the former employee’s account has been closed on their death.

Fraud investigator Phil Butler said many of the cases involved people who worked for the NHS but moved overseas. Their pensions were paid into foreign bank accounts, which were put under the control of partners, spouses or relatives when they died.

In some cases, people posed as their dead relatives to continue fraudulently claiming pensions. Those found guilty of defrauding the public sector pensions agency could be charged with common law fraud which carries a maximum 10year jail sentence. But there have been no prosecutions in Scotland.

Mr Butler, a former head of economic crime at an English police force and now director of Edinburgh-based chartered accountants Aver, said it was much harder to chase pensions paid in error to foreign banks.

He said: “Taxpayers’ money is being wasted when we should be making sure every pound counts within the NHS. Health boards cannot afford to be complacent.”

Dr Jean Turner, of The Scottish Patients’ Association, said better systems are needed to make sure more money is paid back.

“It’s amazing we are coming up to 2014 and we have still not managed to do this,” she added.

Tory health spokesman Jackson Carlaw described the overpayments as a “huge waste of money.” He said: “It’s concerning that some of this spending has been the result of fraud.”

The SSPA said it uses “robust measures” to keep overpayments to a minimum. A spokesman added: “Following a death of a pensioner it is important that relatives inform SPPA as soon as possible. However, it is an accepted feature of all pensions’ administration systems that overpayments will occur from time to time as a result of delays in receiving information.”

FRAUD and blunders by public sector workers have cost Scots taxpayers millions of pounds.

Overpayment, errors or fraudsters simply ripping off the taxpayer cost the public purse £21.1 million in 2008/09, according to the latest National Fraud Initiative figures. A damning report released by Audit Scotland in 2010 revealed 179 pensions were handed to former public sector employees who were dead.

Yet overall, only 89 cases were reported to the procurator fiscal. A similar report in 2008 revealed 186 pensions had been handed to people who had died.