The process of repaying nearly 200,000 mothers who were underpaid their state pension is proceeding “at a snail’s pace”, according to LCP partner and former pensions minister, Steve Webb.
The Department for Work and Pensions has admitted that large numbers of parents, mostly mothers, are missing Home Responsibilities Protection on their national insurance record.
LCP explained that HRP was designed to protect the pension record of those unable to work and pay NI contributions because they were bringing up children.
However, 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 DWP annual report, published today (July 22), stated the work to fix this problem could continue until 2027/28.
Webb 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.
“When the government talks about continuing the exercise into 2027/28 it is clear that the issue is not getting the priority it deserves.”
What happened?
LCP explained the error had arisen because many child benefit claim forms submitted before 2000 did not include a National Insurance number and this means the relevant HRP was not carried across from the Child Benefit computer to the NI computer.
Although HMRC started writing to potential victims last Autumn, the report revealed that, by end March 2024, DWP had assessed just 419 cases out of a total number expected to be affected of 194,000.
In addition, just £2.2mn in arrears has so far been paid out compared with an estimated final bill of £1.15bn.
LCP added that one of the challenges with this issue is that 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.
However, in some cases, HMRC has written to very elderly pensioners encouraging them to check their eligibility on a website before submitting a claim and has asked for records and information about children which parents may not have.
Additionally, even when HMRC has identified a potentially eligible woman and has received a claim form in response, it needs to update NI records and then DWP has to do a state pension reassessment.
The entire process means that only a few hundred mothers who have lost out have so far been paid.
LCP also cautioned that the errors have been going on so long that a “substantial” number of those who missed out have now died and any payment would go to their estate.
In response, a government spokesperson said: “We have identified and are correcting an issue related to the historical recording of Home Responsibilities Protection on the National Insurance records for people who first claimed Child Benefit before May 2000.
