Welfare chiefs have earmarked up to £82million for benefit claimants who may have been wronged as they brace to lose more court battles over the benefit system.
The sum is revealed as a “contingent liability” by the Department for Work and Pensions (DWP) as ministers face an onslaught of attacks in the High Court.
If used, much of the money could end up back in benefit claimants’ pockets through back pay or similar measures.
And today the government’s spending watchdog warns the total will “almost certainly” not be enough.
Office for Budget Responsibility chiefs said it “clearly” does not factor in an imminent ruling – on whether hikes to 2.6million women’s state pension age were unlawful.
It comes as new figures show the DWP has paid out £528million so far due to one flaw in the system alone.
Extra funds are going to sick and disabled people who were wrongly given too little Employment and Support Allowance (ESA) between 2011 and 2014.
DWP chiefs caved and agreed to pay the money, avoiding a possible challenge in the High Court.
An army of 1,200 staff are assessing 600,000 sick and disabled people to check if they are eligible for a payment.
As of July 14, officials have made 88,000 back payments worth an average of £6,000 each – and there were still 229,000 cases left to check.
Some 50,000 of the 600,000 cases that are being checked involve someone who has since died.
The DWP claims their family will get the cash – but so far only 1,000 have led to a repayment.
Meanwhile ministers are pressing on and fighting other cases, including a judicial review against changes to the state pension age that was heard last month.
The Office for Budget Responsibility (OBR) today said future legal cases represent a “fiscal risk” to the DWP.
While the DWP has made a “general provision” of £390million over future costs, only £82million has been listed specifically as a possible liability.
The OBR’s report said: “The cost of future legal cases could be greater than we implicitly assume.
“It will almost certainly be higher than the £82 million in DWP’s accounts.”
Last month the Back to 60 campaign group argued changes to the women’s state pension age were unlawful, with a judgement expected in the future.
But that case is not included in the DWP’s figures.
The OBR said: “DWP’s latest accounts mention the state pension age judicial review in respect of complaints it receives as a result of the continuing campaign.
“But not any associated contingent liability should the judicial review ruling find against the Government.
“Instead it makes only a general statement that ‘The Department has other ongoing legal cases that are not being disclosed as either contingent liabilities or remote contingent liabilities as any disclosure could prejudice the Department’s position’.
“It records a contingent liability of just £82 million in respect of ongoing cases, which clearly does does not include this one.”
If the pensions legal case succeeds the implications could be enormous.
Around 2.6million women born in the 1950s are having their state pension age hiked to make it 66 by 2020, the same as for men.
The Back to 60 group, which brought the High Court case, said the change came with too little notice and women should be paid their earned dues.
The DWP previously claimed reversing changes to women’s pension age would cost £181bn, which campaigners reject.
Last week, Boris Johnson said he would “commit to doing everything I possibly can to sorting out” the issue and he was “not convinced” by forecasts about the cost.
But Pensions Secretary Amber Rudd told the Mirror she was “sceptical” those hit can get further redress and there is currently “no prospect” of that changing.