DWP payments worth £5,000 to be paid to thousands after major admin error

Thousands of people on state pension could be due back payments worth £5,000 following a major administration error. The payments are expected to be delivered before the end of next year.

The error was confirmed by HMRC which began writing to older Brits last year. Those affected had received lower state payments than they were entitled to, reports MirrorOnline.

The main group of people affected by the mistake were stay-at-home mums, who between the years of 1978 and 2000 had claimed Child Benefit. The issue centred round National Insurance credits, which helped people build up entitlement to state pension.

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However these credits were not transferred across properly for some people. When you're out of work, the credit allows you to build up your qualifying National Insurance years.

Up until 2010, they were known previously as Home Responsibilities Protection (HRP). For parents and carers, these reduced the number of qualifying years you needed to be able to claim the state pension. Approximately 210,000 older people are believed to have been impacted and are due a share of underpayments totalling £1.3billion - equivalent to around £5,000 each.

Nigel Huddleston MP, Financial Secretary to the Treasury informed the Commons recently that HMRC was working with the Department for Work and Pensions (DWP) to identify those affected by the error over the next 18 months. The DWP has previously said those closest to the state pension age in their 60s and 70s are being issued letters first.

The Treasury's financial secretary explained to MPs in the commons that the main cause of the issue was that National Insurance numbers were not always recorded when people claimed Child Benefit before 2000. This caused some people to have missing periods of HRP between April 6, 1978 and April 5, 2000.

He said: "HMRC and DWP are working together to correct cases as quickly as possible. HMRC started contacting potentially impacted customers from September 2023, prioritising those above the state pension age. They aim to identify and contact the majority of individuals who may have been affected over the next 18 months so that those eligible receive any arrears payments as quickly as possible."

"To correct this issue, potentially impacted customers will be invited to check their eligibility and make an application to HMRC for Home Responsibilities Protection. To help individuals determine their eligibility, a self-identification tool is available on the GOV.UK website. Where an application is successful, those with a state pension impact will have their award corrected and any arrears paid."

He also added that HMRC and DWP will conduct a wider campaign to ensure that all those who may be eligible for payments are aware of the correction exercise. Of the 210,000 people affected, it is estimated around 60,000 are now deceased and families will be able to claim any money owed.

Anyone who believes they were affected can check their eligibility online using the self-identification tool on GOV.UK here. It takes around five minutes to check and there are four sections to complete. Before completing the tool, the Government asks you to check your National Insurance records first to see if there are any gaps. You will also need to know if you paid National Insurance at the reduced rate for married women, and if HRP is already held on your National Insurance record.

A DWP spokesperson said: “The action we are taking now will correct historical underpayments made by successive governments. We are fully committed to addressing these errors, not identified under previous governments, as quickly as possible. We have set up a dedicated team and devoted significant resources towards completing this, with further resources being allocated throughout 2023 to ensure pensioners receive the support to which they’re entitled.”