MORE than £1billion every year is lost in benefit overpayments due to mistakes by those who receive them.

The losses are enough to pay for 65,000 nurses, 52,000 teachers or 47,000 policemen.

The Government yesterday launched a 'five-year plan' to combat the problem.

But the Tories accused ministers of failing to take the issue seriously enough.

They point out that the Official Error Taskforce set up last year to cut the overpayments employs only two full-time members of staff and has a budget of only £132,000.

David Ruffley, the Tory welfare reform spokesman, said a staggering amount of money is also lost due to 'glaring overpayments' to prisoners and Britons living abroad.

Those living overseas were overpaid £6million last year due to errors by claimants.

Prisoners were overpaid £ 1million a year, students got £ 4million more than they should, and long-term hospital patients were overpaid £2million.

James Plaskitt, a junior minister at the Department of Work and Pensions, yesterday unveiled plans to put an end to the abuse of the system.

These include offering claimants advice in Jobcentres on how to stamp out errors in benefit payments.

The details of pension credit claimants will also be checked since errors made when pensioners apply can remain on the computer system undetected for years.

He said the measures should save £1billion by 2012.

But Mr Ruffley claimed the initiative was too little too late.

'Benefit complexity baffles and bamboozles claimants, who often are completely unaware that they have been overpaid,' he said. 'The system should help them but instead it is confusing them.

He added: 'Ministers must get a grip on these glaring errors much more urgently.

'A task force with just two fulltime staff does not fill me with confidence.'