The errors mostly affect widows, divorcees and women who rely on their husband’s pension contributions for some of their state pension. It is estimated that the average amount those affected have been underpaid is almost £9,000.
The Department for Work and Pensions (DWP) estimates it has underpaid 134,000 pensioners, mostly women, more than £1 billion, with some errors dating as far back as 1985.
The whole situation has been labelled “a shameful shambles” by MPs in the Public Accounts Committee (PAC) yesterday.
To check if one has been underpaid and is owed money, they should contact the Pension Service and ask about their situation.
People can call 0800 731 0469 and press option two.
Some women may be owed automatic pay-outs. This will be the case if they initially missed out on a top-up due to a DWP IT failure.
Married women who hit state pension age before April 2016 and whose husbands turned 65 on or after 17 March 2008 will get a pay-out. This applies if their state pension is less than 60 percent of their husband’s basic state pension.
Additionally, widows whose pension wasn’t increased when their husband was still alive.
This applies if they hit state pension age before April 2016 and got less than 60 percent of their husband’s basic state pension while he was still alive.
Widows who may have been underpaid since their husband died. Widows will often see their basic state pension increase when their husband dies, based on their late husband’s contribution, plus some get extra on top from the ‘second state pension’.
Women aged 80+ who get a state pension of less than £80.45 a week – whether they’re married, widowed, divorced or single – can also get a pay out.
This little-known ‘category D’ non-contributory state pension isn’t dependent on the national insurance contributions they or their spouse may have made.
If they’re the heir of a woman who was underpaid state pension while alive and has since died, they too will get an automatic pay out.
Other people could be due cash too even if they weren’t mentioned above, although they won’t be covered by the Government’s redress scheme.
If someone falls into any of the below two categories below, they will most likely need to contact the Government to get their money back:
• Married women who hit state pension age before April 2016 and whose husbands turned 65 before 17 March 2008.
• Divorced women who should have benefited from their ex-husband’s national insurance record.
PAC said the errors were due to” complex pension rules” and a “reliance on highly manual systems”, and that many of those affected have sadly since died.
They said the cost of fixing the errors is expected to cost £24.3 million by the end of 2023, and that there had been knock on effect for those trying to claim their state pension for the first time, as staff have been moved away from their usual work, slowing the process of dealing with new applications.
Dame Meg Hillier, chairwoman of the PAC, said: “In reality DWP can never make up what people have actually lost, over decades, and in many cases it’s not even trying. The DWP is now on its ninth go at fixing these mistakes since 2018.
“And there is no assurance that the errors that led to these underpayments in the first place will not be repeated in the correction exercise. This is a shameful shambles.”
A DWP spokesperson said: “Resolving the historical state pension underpayments that have been made by successive governments is a priority for the department.
“We have set up a dedicated team and devoted significant resources to processing outstanding cases and have introduced new quality control processes to help ensure this does not happen again. Those affected will be contacted by us to ensure they receive all that they are owed.
“We are carefully considering the Public Accounts Committee’s report and will respond in due course.”