DWP makes six further state pension errors since 2007

An FOI request obtained by Sir Steve Webb, partner at LCP, revealed that the errors range from those affecting a handful of people to multimillion-pound blunders, with several not previously having been made public.

Previously, two state pension errors were made known to the public and subject to large-scale rectification programmes.

However, this recent FOI request revealed that a further six errors in state pension payments have occurred since 2007.  

The most important of these includes an error affecting people who reached pension age under the old system and whose partner reached, or would have reached, pension age under the new system and has now died.

Webb said an error was made in the way these payments were uprated. 

Under the new state pension, women who paid the ‘married woman’s stamp’ — known as the ‘reduced rate election’ — may qualify for a concessionary rate of payment if they are married, divorced or widowed and would otherwise get a low pension in their own right.

In 2019, three years after the new system came into force, it was noticed that some married women were not being paid this transitional amount in line with their legal entitlement.

Webb said cases are still emerging where women are not being paid the correct amount under these special rules.

Additionally, the FOI request revealed some much smaller errors including entering incorrect figures for maximum pensions, some small underpayments of state second pension and errors where people had unusually large amounts of deferred state pension.

Webb said: “Whilst anyone can make a mistake, what is worrying about this catalogue of errors is how long it can take for anyone to spot that anything is wrong. In one case it was three years after the new state pension was implemented before anyone spotted a systematic problem with the payments to certain married women.  

“It is also surprising that information about these errors and correction exercises has not previously been made public. DWP need to improve on two fronts — better error checking to make sure people are not paid the wrong pension in the first place, and greater transparency so that the public is told when things have gone wrong”.

The two incidents previously identified included a number cases where parents were due ‘home responsibilities protection’ for time at home with children but this was never mapped onto their state pension record. The correction exercise for this ran from 2009 to 2011 and benefited around 36,000 people and resulted in £83mn in arrears being paid. 

The second was the current correction exercise running from 2021 to 2023, designed to identify 134,000 pensioners who have been underpaid state pensions and are owed around £1bn in back payments.

Last month, DWP published its latest progress on these state pension underpayments which Webb said was “way behind schedule”.

So far, the government department has paid £94.3mn to those who reached state pension age before 2016 and are entitled to further payments, which should have been paid to them automatically but were not.

Between January 11 2021 and February 28 2022, the department’s checking process identified 14,239 underpayments. This was an increase on the 9,491 underpayments totalling £60.8mn it had identified by September last year.

The DWP has been contacted for comment.

This article originally appeared on FTAdviser.com