Many elderly women lost out on state pension because junior civil servants failed to manually update their individual records during past decades, it has emerged.
Well over a 100 government staff are now working to assess and manually correct individual records and more are being assigned to sort out the ‘significant legacy issue’, MPs have been told.
Tens of thousands of elderly women could be owed an estimated £100million in state pension, in a scandal uncovered by former Pensions Minister Steve Webb and This is Money last year.
Pensions Minister Guy Opperman: Junior civil servants failed to manually uprate women’s state pensions as they should have done, he told MPs in a virtual committee hearing
Since we began the investigation, we have repeatedly asked the Department for Work and Pensions the cause of the massive blunder that deprived so many women of pension cash for years, but never received an explanation.
At a work and pensions committee hearing on Wednesday, Pensions Minister Guy Opperman told MPs how errors were originally made and what is being done to fix them now.
‘The process is as follows. Someone had to at a particular stage take someone’s individual entitlement and add on an extra entitlement to that, and that is not done by a computer that is done by an individual.
>>>Are YOU being underpaid state pension? Find out how to check below
‘And so what we’re dealing with here is a junior civil servant at DWP at some stage sometimes 12 to 20 years ago failing to uprate a particular entitlement of a particular person.
‘Not everybody, in fact we’re quite clear it’s definitely not the majority, but some individual claims have not been manually uprated by an individual working in a pension centre.
‘We then have to find those individual cases and then we have to try and reassess them.’
Opperman noted that this was ‘exceptionally difficult’ operation to carry out during the Covid-19 crisis.
But he promised to give MPs a full and detailed update on the issue next month, or at the latest in March, because he didn’t want to give them a ‘half-baked’ one now.
Why are some women being underpaid state pension?
Married women who retired on small state pensions before April 2016 should get an uplift to 60 per cent of their husband’s payments once he reaches retirement age too.
Since 2008, the increases are supposed to be automatic, but before that women had to apply to get the full sum they were due.
Find out how to check if you are underpaid and what to do about it below, or if you are a widow see here.
‘I can guarantee we have pretty much quadrupled the workforce, which in Covid is extraordinarily difficult, so we have moved people around and created a dedicated team.
‘We take it very seriously and we are committed very strongly to trying to redress this matter.’
Opperman also explained: ‘It’s a significant legacy issue and the problem is, if I can be blunt about it, is each individual case has to be assessed individually.
‘It is not a generic problem that you can then say “oh well, because we had this number of people and we know this took place on this date all of these particular records are wrong”.’
It is not clear from Opperman’s explanation to MPs today whether one, a few or many junior civil servants were not updating women’s records properly, or what the role of managers was in overseeing this process.
However, the number of women found to be underpaid points to a serious administrative failure.
Late last year, the DWP was estimated to have paid out £25-30million to 1,900 women – one in four of the cases it had processed to date – and at that point had 37 staff working to fix the debacle.
But it is under attack for a chaotic response in past months. We reported on cases where elderly women who were underpaid tens of thousands of pounds between them suffered a catalogue of errors and delays at the hands of staff.
The Government’s bill for putting the issue right could escalate dramatically beyond £100million if mistakes in the state pensions of widows and over-80s are found to be widespread.
Hundreds of emails have poured in from readers anxious to know if they have missed out on state pension since we began our investigation.
Steve Webb: ‘The fact that more than one hundred civil servants are working on putting things right shows the scale of the problem’
Webb, now a partner at pensions consultant LCP, has previously called on the DWP to accelerate the process of checking records and not continue to rely on people phoning up one by one.
Responding to Opperman’s update to MPs, he said: ‘The Minister has finally acknowledged that this is a “significant” issue, and the fact that more than one hundred civil servants are working on putting things right shows the scale of the problem.
‘We are still at the stage where the only people who have got money from the government are those who have spotted a problem and phoned up to ask for a reassessment.
‘We urgently need to move to the phase where the government uses its own records to systematically track down everyone who is being underpaid and proactively put things right.
‘This needs to include not only married women, but widows and the over 80s as there is clear evidence that there are distinct problems for some in these groups as well.’
What does the DWP say?
‘We are aware of a number of cases where individuals have been underpaid state pension. We corrected our records and reimbursed those affected as soon as errors were identified,’ says the DWP.
It adds that married women who are already getting a state pension are required to make a separate claim to have it increased if their husband reached state pension age before 17 March 2008.
A claim is not needed if their husband reached state pension age from 17 March 2008 onwards.
The DWP encourages anyone who thinks they have failed to claim a state pension increase they are eligible for to contact the department.
It says ‘interest and consolatory payments’ will be considered on a case-by-case basis and depend on individual circumstances.
Read the DWP’s response to Steve Webb’s petition calling for a full search for underpaid pensioners here.
Are YOU being underpaid state pension?
But Webb stresses that the website is simply designed as a useful tool, and anyone with any doubt about the amount of pension they are receiving should contact the Department for Work and Pensions.
If you are a widow and think you have been underpaid, find out more here.
Meanwhile, many women appear to be struggling to get interest on their belated state pension payments, and it is worth following this up if you receive a backpayment.
This is Money understands the DWP is deciding interest payments based on whether a woman was underpaid for more than a year, whether it was down to government error and whether interest would amount to £10 plus.
Readers can contact Steve Webb at [email protected]. Please put DWP CLAIMS in the subject line and include your own and your husband’s date of birth (and death if you are a widow), how much you both receive in state pension and a contact telephone number.
But apologies in advance, we cannot reply to everyone and you should always prioritise contacting the DWP using the details above.
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