Six groups of people have been encouraged to contact the Department for Work and Pensions (DWP), as they may be entitled to thousands of pounds in back payments - dating as far back as 1985.
It has been revealed by the National Audiot Office (NAO), that some 237,000 people who qualify for State Pension have been underpaid a total of £1.46 billion - The Daily Record reports.
In a report put together by the Comptroller and Auditor General of the NAO, it is highlighted that the DWP has “identified several new groups of pensioners potentially affected by underpayment, the most significant relating to Home Responsibilities Protection (HRP)."
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The Liverpool Echo reports that HRP was a scheme implemented to help protect parents' and carers' State Pension credits while they stayed home to look after youngsters, and was replaced by National Insurance credits in 2010. However, these credits were not recorded accurately on NI records.
The NAO report says that the DWP is working with Her Majesties Revenue and Customs (HMRC) to further identify the scale, causes and options to rectify these cases. The newly identified errors account for most of the increase in the State Pension underpayment rate, which has marginally moved from 0.3 per cent to 0.5 per cent.
People may still be able to apply for HRP if, for full tax years (April to April) between 1978 and 2010 - find out more on the GOV.UK website, here.
Former pensions minister, Sir Steve Webb, now a partner at LCP (Lane Clark & Peacock) first highlighted the State Pensions underpayments while working with This Is Money and shared on social media that he raised the HRP issue 14 years ago. Posting on Twitter, Sir Steve said: “DWP also admit that there are errors on missing 'home responsibilities protection' (credits for parents at home with kids). I first raised this with them in 2008 and they did a correct exercise, but a decade later there are still big errors.”
The NAO also revealed that the increase in the number of underpayments is due to the DWP undertaking new computerised scans of their data, to help identify cases that staff need to review. This is a process that they were unable to conduct last year.
The DWP has now conducted all of the necessary scans, but is unsure of the full extent of underpayments until it has reviewed every individual case in its entirety. The outstanding liability is thought to sit at around £1.35 billion - after payments made up to March 31, 2022.
DWP aims to complete said review of underpayments by the end of next year, but recently told the Work and Pensions Committee that it expects to complete the exercise for the most vulnerable at over 80 years old, as well as those on category BL, by spring 2023.
DWP also plans to ramp up recruitment from 500 people reviewing cases to 1,500 to complete the review by the end of December 2023. However, the NAO said that on current assessments, review and correction of all widowed pensioner cases may take until late 2024.
It said: "A delay of this length would increase the total amount underpaid to pensioners by an estimated £14 million."
The DWP started the Legal Entitlements and Administrative Practice (LEAP) exercise in January 2021 to address State Pension cases where people were being underpaid.
Who may be due back payments for State Pension?
- Married women whose husband turned 65 before March 17, 2008 and who have never claimed an uplift to the 60% rate
- Widows whose pension was not increased when their husband died
- Widows whose pension is now correct, but who think they may have been underpaid while their late husband was still alive, particularly if he reached the age of 65 after March 17, 2008
- Over-80s who are receiving a basic State Pension of less than £80.45
- Widowers and heirs of married women , where the woman has now died but was underpaid state pension during her lifetime
- Divorced women , particularly those who divorced after retirement, to check that they are benefiting from the contributions of their ex-husband
Peter Schofield, Permanent Secretary at DWP, also told the Work and Pensions Committee: “If anyone in any circumstance not covered by the LEAP exercise thinks that there is potentially an issue, they should get in touch with us.”
How to check if you are affected or make a claim:
A phone call to the pension service is the quickest way to find out if you are eligible for a State Pension refund.
The best number to call is 0800 731 0469 but full contact details can be found on the Gov.uk website here.
A DWP spokesperson said: "The action we are taking now will correct historical underpayments made by successive governments. We are fully committed to addressing these errors, not identified under previous governments, as quickly as possible. We have set up a dedicated team and devoted significant resources towards completing this, with further resources being allocated throughout 2022 and 2023 towards the underpayments exercise."
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