The Department for Work and Pensions (DWP) is taking action to correct pension mistakes that have impacted many women. As part of this, the DWP is sending out payouts of £8,300 to women aged between 60 and 70 who have been underpaid due to errors made in the past.
So far, around £104 million in arrears has been paid out, with an average payment of £8,377. However, this amount is only a small fraction of the estimated £1.1 billion that was originally set aside by the DWP for this correction.
Why Are Some Women Being Underpaid?
The issue stems from the Home Responsibilities Protection (HRP) scheme, which was in place from 1978 to 2010. This scheme was designed to help parents—especially mothers—who took time off work to care for children by protecting their state pensions.
However, there was a major problem: errors were made in recording National Insurance numbers during child benefit claims before May 2000, leading to missing HRP credits. As a result, many women have missed out on the pension they were entitled to, with underpayments estimated to be between £520 million and £1.2 billion.
Steps Taken by the Government
To address the issue, the DWP and HM Revenue and Customs (HMRC) have launched a correction program. This program has already identified over 800,000 affected records and returned more than £736 million to retirees. Letters are being sent out to individuals, particularly those who are over the state pension age, to notify them about the correction and guide them on how to ensure their records are updated.
Criticism of the Approach
Despite the efforts, there has been criticism of how the DWP is handling the situation. Steve Webb, a partner at pension consultancy LCP, expressed his frustration, stating that the strategy has not been effective in reaching those who need help.
He pointed out that sending letters with instructions on how to navigate a two-stage online process has not worked well, especially for older people. Many are cautious of online scams, and asking them to go through an online eligibility check before submitting a claim is seen as a barrier.
Webb argued that although the DWP deserves credit for investigating the issues, the strategy needs to be adjusted to ensure more women receive the pension payments they are owed.
What Happens Next?
With the correction process still underway, the DWP is expected to continue reaching out to those who may have missed out on their pensions. The government is under increasing pressure to make sure these payments are processed fairly and efficiently, especially for those who may find it difficult to navigate the online claim process.
The Bigger Picture
The ongoing pension underpayment issue has highlighted significant flaws in the system that have affected many women, particularly those who took career breaks to care for children. These women have been unjustly deprived of their rightful pensions, and the government is now scrambling to fix these mistakes. With continued efforts and a more effective approach, many believe that those who have been wronged will finally receive the compensation they deserve.
FAQ:
Q: Why are women receiving £8,300 from the DWP?
A: Women aged 60-70 are receiving £8,300 in payouts due to underpaid state pensions caused by errors in the Home Responsibilities Protection (HRP) scheme. These errors led to missing pension credits, especially for mothers who took career breaks to care for children.
Q: How did the DWP make this error?
A: The error occurred when National Insurance numbers were incorrectly recorded during child benefit claims before May 2000, leading to missing HRP credits for many women.
Q: How many people are affected by the DWP’s pension mistakes?
A: Over 800,000 records have been identified, with more than £736 million already paid out to retirees.
Q: How can I check if I’m eligible for the £8,300 payment?
A: If you are over the state pension age and may have been affected by the pension error, you should receive a letter from the DWP. The letter will provide instructions on how to check your eligibility and submit a claim.
Q: Why is the DWP’s approach to contacting people being criticized?
A: Critics, including pension expert Steve Webb, argue that the online process for claiming the payment has been ineffective, especially for elderly people who are wary of scams and find the online check difficult to navigate.
