The Department of Work & Pensions (DWP) is under fire for failing to fix errors in pension payments for almost 200,000 mothers.
A problem of underpayments has been identified in the State Pension of women who gave up work for several years to care for their children when they were younger.
These women should have been given National Insurance credits for these years in order to ensure they qualified for the full State Pension. However, an admin error meant this did not happen for approaching 200,000 women with the result they have been underpaid.
So far, just 419 cases have been reviewed and settled. As a result, just £2.2m in arrears has been paid out compared with an estimated final bill of £1.15 billion.
It has emerged that as many as 43,000 of the women who lost out due to the error have died without any recompense.
Former pensions minister and now LCP partner, Steve Webb, condemned the slow rate of progress in cleaning up the mess.
He said: “Once the government realised that nearly 200,000 mothers may have been underpaid their state pension, action should have been taken to fix the problem with much greater urgency, especially as many of those who have lost out are now elderly.
“Instead, DWP has so far assessed fewer than 500 cases out of that total, and the exercise is proceeding at a snail’s pace.”
He said the DWP is now looking at continuing its review of the situation through to 2027/28, by which time many of the women involved may have died.
Mr Webb complained: “It is clear that this issue is not getting the priority that it deserves.”
Details of the scandal have been revealed in the Annual Report by the DWP. The Government has admitted that large numbers of parents – mostly mothers – are missing ‘Home Responsibilities Protection’ (HRP) on their National Insurance record.
HRP was designed to protect the pension record of those unable to work and pay NI contributions because of bringing up children.
A check of state pension payments – prompted by the previous discovery of separate errors affecting over 100,000 widows, married women and over 80s – revealed this fresh group of errors for mothers.
The error has arisen because many Child Benefit claim forms submitted before 2000 did not include a National Insurance number and this means that the relevant HRP was not carried across from the Child Benefit computer to the National Insurance computer.
The HMRC started writing out to potential victims last Autumn, however as of March this year, the DWP had assessed just 419 cases out of a total number expected to be affected of 194,000.
The problem has been exacerbated by the fact the HMRC has destroyed all its old Child Benefit records and therefore has to undertake a ‘fishing expedition’ writing out to women potentially affected and encouraging them to make a claim.
In some cases, HMRC has written out to very elderly pensioners encouraging them to check their eligibility on a website before submitting a claim or has asked for records and information about children which parents may not have.
Even when HMRC has identified a potentially eligible woman and has received a claim form in response, it then needs to update NI records and then DWP has to do a state pension reassessment.
A substantial number of those who missed out have now died and any payment would go to their estate. The DWP annual report suggests that out of a best estimate of 194,000 mothers missing out, around 151,000 are still alive but 43,000 have died.
