Married, divorced and widowed women over the State Pension age may be due more than £9,000 in backdated pay.
A recent report by the watchdog that oversees the Department for Work and Pensions (DWP) has announced that approximately 237,000 people over the State Pension age have been accumulatively underpaid £1.46 billion.
According to the National Audit Office (NAO) report, this marks an increase of £429 million and around 105,000 pensioners compared with the DWP's estimate at the end of 2020-21.
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The report, compiled by Comptroller and Auditor General of the NAO Gareth Davies, reveals that underpayments date back as far as 1985. It also highlights that the DWP has “identified several new groups of pensioners potentially affected by underpayment, the most significant relating to Home Responsibilities Protection (HRP)".
As reported by the Daily Record, HRP was a scheme intended to help protect parents’ and carers’ State Pension credits while they stayed home to look after children. It was replaced by National Insurance credits in 2010, though these were not recorded accurately on National Insurance records.
The report states that the DWP is working alongside HMRC to learn more about the scale, potential causes and options to correct these cases. The newly discovered errors account for most of the increase in the State Pension underpayment rate from 0.3 per cent to 0.5 per cent.
Former pensions minister Sir Steve Webb, who is now a partner at LCP (Lane Clark & Peacock) first called attention to the underpayments while working with This Is Money. He took to social media to reveal that he raised the issue 14 years ago.
He stated: “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.”
According to the NAO, the rise in the number of underpayments is also due to the DWP now undertaking digital scans of its data. This has led to it being able to identify new cases needing a review, which it was unable to do last year.
The DWP has now finished all of the scans needed to locate potentially affected cases. However, the full extent of the underpayments will not be known until all cases are reviewed;
Outstanding liability, after payments made up to March 31 2022, is estimated by the DWP to be £1.35 billion.
The DWP is aiming to finish its State Pension review by the end of 2023. However, it told the Work and Pensions Committee that it expects to complete the exercise for people over the age of 80 by next spring.
The UK Government department also intends to increase the number of people reviewing cases from 500 to 1,500.
However, the NAO said that on current assessments, review and correction of all widowed pensioner cases may take until late 2024.
It stated: "A delay of this length would increase the total amount underpaid to pensioners by an estimated £14 million."
The DWP began the Legal Entitlements and Administrative Practice (LEAP) exercise in January 2021 to investigate State Pension underpayments.
Who may be due back payments for State Pension?
There are six types of people who are particularly encouraged to get in touch with the pension service to check if they are entitled to more 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
How to check if you are affected or make a claim
The easiest way to learn if you qualify for a State Pension refund is to get in touch with the pension service. They can be reached on 0800 731 0469, but full contact details can be found on the Gov.uk website here.
A DWP spokesperson commented: "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."
Fraud and error exercise
This year the DWP has measured fraud and error in:
- Universal Credit
- State Pension - including fraud and claimant error for the first time since 2005-06
- Housing Benefit
- Employment Support Allowance
- Pension Credit
- Attendance Allowance - for the first time ever
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