So far, around £104million in arrears have been paid out, with an average payment of £8,377. However, this is only around one-tenth of the original £1.1billion estimate set aside by the DWP last year
HMRC and the Department for Work and Pensions (DWP) has sent over 370,000 letters to pensioners who are due a payout worth over £8,300.
The payments come as an official error caused these individuals to have their state pension underpaid. The issue, first coming to light in 2022, saw large numbers of parents – mostly stay-at-home mums who claimed Child Benefit – missing Home Responsibilities Protection (HRP) on their National Insurance record.
HRP reduced the number of qualifying years you need to claim the state pension. The main cause of the issue was that National Insurance numbers were not always recorded when people claimed Child Benefit before 2000.
This caused some people to miss periods of HRP between April 6, 1978, and April 5, 2000, which subsequently affected their state pension eligibility when they claimed it. HMRC and the DWP are currently working to identify those affected by the error and pay them what they are owed.
The government departments previously said letters are being issued first to those closest to the state pension age – so those who are in their 60s and 70s.
According to the latest update, the government departments have sent 370,018 letters, processed 8,639 applications under the state pension age, and 44,296 applications over the state pension age. In total, the DWP received 22,781 cases from HMRC and processed 21,878 of them.
So far, around £104million in arrears have been paid out, with an average payment of £8,377. However, this is only around one-tenth of the original £1.1billion estimate set aside by the DWP last year.
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Industry experts have raised concerns over the pace of the government’s progress in addressing HRP errors, which is set to continue until 2027/28.
In a report published by the DWP alongside the most recent update, the department shared reasons why the response rate to the department’s letter scheme was low.
One of the main reasons was that many recipients are elderly with limited internet skills, yet the Government has implemented a “digital by default” application process requiring online eligibility checks and claims.
Last year, the government departments set up the Legal Entitlements and Administrative Practice (LEAP). This allowed those affected to apply, correct their records, and make both arrears and ongoing revised state pension payments online.
Although the government is sending letters to those affected, many recipients said that they thought the letters might be scams, so did not respond. People also reported being anxious about engaging with the government.
Some also thought that they probably would not be eligible or that it was now “too long ago” to put things right.
The research also found that “participants generally relied on their own assessments of eligibility, rather than using the online tool identified in the letter”. Some simply did not understand the connection between historic receipt of Child Benefit and entitlement to HRP and how this could affect their state pension.
Steve Webb, partner at pension consultants LCP, first raised concerns about missing HRP more than 15 years ago and expressed disappointment at the results.
He said: “It is deeply disappointing that efforts to track down mothers being underpaid their state pension have so far failed to reach the vast majority of those who the Government thinks have lost out. Writing letters to elderly people which guide them towards a two-stage online process was always going to have a low success rate.
“People are understandably wary of scams, and expecting them to do their own online eligibility check before submitting an online claim was bound to put many people off. Whilst DWP deserve credit for conducting research into the reasons for the failure of the strategy so far, it is vital that efforts are now redoubled to make sure that far more people get the state pension that should have been theirs by right.”
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