DISABLED people have been plunged into “distress and financial difficulties” by a second botched benefits test, a watchdog warns today (Thursday).

The bungled introduction of the new personal independence payment (PIP) – being piloted in the region – is sharply criticised by the National Audit Office (NAO).

Its report warns that:  

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  • It is taking 107 days – three-and-a-half months - to reach a decision on claims, instead of the expected 74 days.
  • Claims involving the terminally ill are taking 28 days – instead of ten days.
  • A backlog of 92,000 claims had built up by October last year, when the decision was taken to extend trials in parts of the North-East.
  • Each PIP claim costs an average £182 to administer – more than three times the £49 cost for disability living allowance (DLA), which it replaces.
  • The delays will leave a £140m black hole in the expected department for work and pensions savings of £740m.

The report highlighted how claimants were not told how long their claims would take, which was “creating distress and financial difficulties”.

This week, numerous MPs warned ministers that constituents were now reporting delays of six months or longer.

Condemning “poor early operational performance”, Amyas Morse, the NAO’s head, said: “The department did not allow enough time to test whether the assessment process could handle large numbers of claims.”

And Margaret Hodge, chairwoman of the Public Accounts Committee (PAC), which shadows the NAO, said she was “shocked” by the findings.

She added: “The current backlog and delays in processing claims are simply unacceptable and will no doubt cause real distress for vulnerable claimants.”

PIP came in for new claimants across the North-East last year and, from this month, for claimants “reporting a change in condition” in Darlington, York and Harrogate.

By 2018, around 210,000 disabled people in the North-East and North Yorkshire will all be re-tested and either moved onto PIP, or denied payments.

Ministers have predicted that the number of disabled people receiving PIP will be 600,000 lower than if DLA had been retained.

Baroness Tanni Grey-Thompson, Britain’s most successful Paralympian, who lives in Redcar, has warned the shake-up has left many people “really scared”.

Claimants needing help to pay for assistance will receive the standard weekly rate (£53) or the enhanced rate (£79.15) – with extra money to help with mobility.

In the North-East, Atos – the company attempting to walk away from separate controversy over the re-testing of incapacity benefit claimants – has the contract for PIP tests.

A spokesman insisted it was committed to the PIP contract. More staff were being recruited and more letters being sent to claimants, to keep them better informed.

He said: “We appreciate that delays cause anxiety and frustration which is why we are taking immediate action to address the situation.”