More than 200,000 pensioners have been left out of pocket by a total of £1.3billion because of blunders with state pension payments.
The Department for Work and Pensions is accused of being “asleep at the switch” as mistakes with National Insurance records led to huge errors over decades. According to DWP estimates, the 210,000 people affected are due an average back payment of £5,000.
Dame Meg Hillier MP, Chair of the Public Accounts Committee, said: “Many pensioners have been left significantly out of pocket by up to thousands, while DWP has been asleep at the switch. These are injustices that may never be corrected for some. We are now in a place where Parliament needs assurance that the State Pension is being paid accurately.”
She added: “Frankly, paying pension accurately is a basic that we expect from DWP and not recommendations that our Committee ought to be having to make.”
Those affected were historically entitled to the Home Responsibilities Protection benefit and wrongly have gaps in their National Insurance records. HM Revenue & Customs, which is responsible for administering the records, has warned it will be “very difficult” to identify those who have been impacted.
It plans to contact people it thinks may be affected and invite them to make a claim for HRP. It will then correct the National Insurance record so DWP can pay back any missing State Pension. The underpayments come on top of the discovery last year that 165,000 pensioners had missed out on £1.2billion due to historical errors by DWP.
The Public Accounts Committee said it was concerned that other similar errors may have taken place and was alarmed that the DWP was unable to give assurances they won’t be repeated in the future. It also highlighted worries how the issues were able to build up over many years before the DWP was alerted to them.
In its report, it also raised concern about the level of fraud related to Universal Credit payments. A staggering £5.5billion was overpaid in the 12 months to March because of benefit fraud and error. An estimated 18% of Universal Credit claims contain an element of fraud, according to the committee.
A DWP spokesman said: “Our priority is ensuring everyone receives the financial support they are entitled to, 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... We are now carefully considering the Committee’s report and will respond to its recommendations in due course.”
Who is entitled to extra state pension cash?
Hundreds of thousands of people have not been paid enough state pension because there were wrongly gaps in their National Insurance record because they did not get Home Responsibilities Protection even though they were entitled to it.
It is estimated 210,000 people are due an average back payment of £5,000 each.
What was Home Responsibilities Protection?
Home Responsibilities Protection (HRP) was a scheme to help protect parents’ and carers’ State Pension. National Insurance credits replaced HRP in 2010. You’ll have received HRP automatically if between 6 April 1978 and 5 April 2010 you were claiming:
- Child Benefit for a child under 16
- Income Support because you were looking after a sick or disabled person and were not available for work.
You’ll need to apply for HRP if you think it’s missing from your National Insurance (NI) record.
Who can apply?
You may still be able to apply for HRP if, for full tax years (6 April to 5 April) between 1978 and 2010, you were either:
- sharing the care of a child under 16 with a partner you lived with and they claimed Child Benefit instead of you - you may be able to transfer their HRP
- caring for a sick or disabled person.
You can also apply if, for a full tax year between 2003 and 2010, you were either:
- a foster carer
- caring for a friend or family member’s child (‘kinship carer’) in Scotland.