DWP underpaid 187,000 people in huge £1billion state pension error
Thousands of people - mainly women in their 60s and 70s - may have been underpaid about £1billion due to a huge state pension error.
The issue largely affects stay-at-home mums who made a claim for Child Benefit before May 2000.
If they made a claim without submitting a National Insurance number, their National Insurance credits may not have been transferred across properly.
This could mean they were then wrongly underpaid their state pension for a number of years.
Your state pension entitlement is based on your National Insurance record.
Six teachers open up on 'difficult' strike decision - and why they are doing it
You need around 35 qualifying years of National Insurance contributions to get the full new state pension, or 30 years for the full basic state pension.
National Insurance credits help you build up your qualifying years when you're not making contributions - for example, if you're out of work - and were previously known as Home Responsibilities Protection (HRP).
HRP reduced the number of qualifying years you need to claim the state pension, and was available between 1978 and 2010 for those caring for parents and carers.
The Department for Work and Pensions (DWP) and HMRC are now working together to find people who might have been entitled to HRP and have no HRP on their record.
HRP was replaced by National Insurance credits in 2010.
HMRC will look at National Insurance records to identify as many people as possible, then the DWP will recalculate your state pension and check if you are due any arrears.
Those affected will be contacted from autumn 2023 in phases, in order of how close they are to state pension age.
If you are found to be eligible for money back, you will be invited to put in a claim online.
In an official report published this afternoon, the Government said it estimates a total of 187,000 people could be owed money, 43,000 of which have now passed away.
The DWP estimates just over £1billion is owed to those affected - based on this, the average arrears payment would be just over £5,000.
Warning as millions on Universal Credit could miss out on hundreds of pounds
However the DWP has admitted there is uncertainty in how much could be paid out, and said the total figure could be anywhere between £300million and £1.5billion.
How much you could be owed also depends on how much you were underpaid by, and for how long.
Families of those affected who have sadly died will be entitled to check their eligibility and make a claim for any arrears.
The mass underpayments were first highlighted by Steve Webb, previously the minister of state for pensions and now LCP partner, last year.
LCP has previously campaigned to raise awareness of the issue and launched a "mothers missing millions" website to help people work out if they might be due money.
Steve Webb is now urging anyone who has received Child Benefit since 1978 to check their National Insurance record.
He said: "The scale of these errors is huge. It is shocking that so many women have been underpaid so much money.
"This makes it essential that things are put right as a matter of urgency."
Tom Selby, head of retirement policy at AJ Bell, comments: "Given many people rely solely on their state pension to make ends meet in retirement, the fact even more have been identified as receiving too little – particularly during a cost-of-living crisis – as a result of administrative failures is unforgivable.
"The most important thing now is that those who have been underpaid are identified as quickly as possible and put back in the position they should have been."
A Government spokesperson said: "Most people’s records will be unaffected, and we will shortly be launching a new online tool to help people check whether they need to claim.
"HMRC will also begin writing to those likely to be affected from the Autumn.
"Our priority is ensuring everyone receives the financial support to which they are entitled, and State Pension underpayment rates due to Official Error remain low at 0.5% of expenditure.
"Where errors do occur, we are committed to fixing them as quickly as possible."
What to do next
You don't need to wait for HMRC to contact you if you suspect you've been affected by this error.
First, check your state pension and your National Insurance record to see if you're missing HRP.
If something doesn't look right, and you reached state pension age before April 6, 2010, call the National Insurance helpline on 0300 200 3500.
To claim missing HRP up until March 2010, you need to fill in the form CF411.
Read more similar news:
Comments:
comments powered by Disqus
