DWP update on £12,500 backpayments for thousands and 'progress is being made'

The Department for Work and Pensions has £1 billion left still to claim as it pays back up to £12,500 to tens of thousands of people. The DWP has issued an update over backpayments to claimants after it was found to owe an eye-watering 97,000 households.

Although more than half a billion in cash has been returned to older people, experts estimate that there is a further £1 billion waiting to be claimed by pensioners. The DWP uncovered potential errors through the State Pension Underpayments Legal Entitlements and Administrative Practice (LEAP) exercise.

Helen Morrissey, head of retirement analysis at Hargreaves Lansdown, said: "Progress is being made to rectify the large-scale issue of state pension underpayments, but it is very slow. Just over £571m has been returned so far but with estimates suggesting the scale of underpayments could be around £1.5bn there's still a very long way to go.

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"People have the expectation that the state pension they receive is correct but a series of errors in an already overly complicated system means that for many thousands of people this expectation has been incorrect.

"Some who queried the issue with DWP over the years were told there was no problem, and many have suffered real financial hardship as a result. These people have been let down and need resolution as soon as possible."

The State Pension LEAP exercise is checking State Pension awards for Category BL (Cat BL), whi h is people who are married or in a civil partnership who reached State Pension age before April 6, 2016 and should be entitled to a Category BL uplift based on their partner’s National Insurance contributions.

It is also checking 'Missed conversions' where people who have been widowed and their State Pension was not increased to include any amounts they are entitled to inherit from their late husband, wife or civil partner.

It is also checking Category D (Cat D) which is people who reach age 80 and who are getting some Basic State Pension but less than the £85.00 (in 2022-23) and may therefore, subject to satisfying the appropriate residency conditions, be entitled to Cat D State Pension of £85.00 a week.