Government figures have shown that more than £57m in benefits were paid to dead people last year, representing a misplaced UK investment that is highly embarrassing for the Government.

The junior work and pensions minister James Plaskitt said 98% of overpayments occurred when death came too late to stop an automated payment.

Most of the overpayments were for pensions (£34.4m), with £13.3m paid in income support to people who no longer needed it as their needs had dwindled to a zero budget.

The overpayments also comprised £8.1m paid out in pension credit. £0.1m in jobseeker’s allowance and £1.6m disbursed in incapacity benefit.

Tory work and pensions spokesperson Philip Hammond said that the payments were symptomatic of a department in chaos, and asked a Parliamentary question of Plaskitt in the House of Commons about the botched UK investment represented by the error.

In a Commons answer to Hammond, Plaskitt said the 2005-06 payments did not include housing benefit or council tax benefit.

He said overpayments were also made “when a claimant dies and it becomes apparent from probate records that the information in the original claim was inaccurate”.

Plaskitt added that in order to safeguard the UK investment constituted by taxpayers’ money, efforts were being made to reduce the amount of money paid to dead people.