Iain Duncan Smith's Department for Work and Pensions is considering legislation to protect it from potentially expensive legal action by welfare claimants who had money docked for refusing work placements, it has emerged.

The move follows a court ruling last month that schemes requiring claimants to do unpaid work experience or lose benefits were unlawful, because of the way the regulations were framed.

Mr Duncan Smith insisted at the time that he had "no intention" of repaying benefits to anyone who lost out, and he has launched an appeal to the Supreme Court against the ruling.

New regulations were laid on the day of the court ruling to ensure the DWP can continue using the sanction of loss of benefits to ensure claimants take part in schemes.

But the department confirmed it was considering its options in the case of defeat at the Supreme Court. It is believed defeat could prompt action from tens of thousands of claimants who have had their benefits docked, seeking millions of pounds in repayments.

A DWP spokesman said: "The Court of Appeal made clear we can require people to take part in some of our schemes to help them back to work, and to remove their benefit if they don't.

"That's why we are looking at options to protect hard-working taxpayers and make sure we won't be paying back money to people who didn't do enough to look for work."

The spokesman confirmed that legislation is among the options under consideration.

Shadow work and pensions secretary Liam Byrne said: "Bungling DWP ministers have turned the Work Programme into a West Coast Main Line-style fiasco. Hundreds of thousands of sanctions might now be illegal because Iain Duncan Smith messed up the regulations and now the taxpayer might be on the hook for over £100 million.

"It simply beggars belief that this Government is now so incompetent it can't even organise a simple work experience scheme. We'll be demanding ministers come to Parliament urgently to explain themselves."


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