A report by the Public Accounts Select Committee revels that £2.2bn of overpayments and £1.3bn of underpayments were made in 2009-10 as a result of administrative errors by its staff and mistakes made by claimants.
The report identifies a dire failure of the IT systems to support users. "The IT systems have not been designed from the perspective of the user," said the report.
The committee said the department needs to "step up its performance significantly" as it lacks a "clear plan of action" to achieve the target of a 25% reduction in the cost of overpayments from fraud and error by 2015.
The committee advised the DWP to improve its use of data to help it identify sources of error and prevent mistakes from occurring.
Plans to simplify benefits administration for staff and benefit applicants and minimise errors via the introduction of Universal Credit in 2013 will be too late to contribute to achieving targets, added the committee.
The department's strategy to address errors included increased training and support as well as major IT improvements in 2007.
A report by the National Audit Office (NAO) in November 2010 highlighted the Department's 140 core processing systems, many of which are relatively old and not well-linked to others, contributed to payment errors.
This story was first published by Computer Weekly