DWP urged to check for State Pension errors affecting men and women who are divorced

The Department for Work and Pensions has been asked to investigate potential State Pension errors affecting people who are divorced. The DWP is currently correcting underpayments on women who are married, widowed, or over 80 in what is called the Legal Entitlements and Administrative Practice (LEAP) exercise.

The Work and Pensions Committee of the House of Commons has asked the DWP to look at whether divorcees should also be included in the reviews. It comes after former pensions minister Steve Webb found "a significant number of divorced women with low State Pensions" and asked if the rules had been properly applied in these cases. Divorced men could also be affected.

Committee chair Sir Stephen Timms has this week published a letter he has written to the department in which he says: "I understand that as part of LEAP exercise, DWP is manually reviewing at-risk Category BL (married), Category D (over 80) and widowed pensioner cases at risk of having been underpaid to determine whether an underpayment has occurred and the value of any arrears.

"However, another group potentially underpaid includes men and women who are divorced but do not qualify for a full Category A State Pension. They may be able to use their former spouse's National Insurance contributions to increase the amount of their basic State Pension."

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Sir Stephen added: "It has since come to my attention that some divorced men are also affected. For example, a man divorced might be entitled to less than the full amount of the basic State Pension based on his own contributions, but to the full amount once the contributions of his former spouse are taken into account.

"I would be grateful if you could confirm whether such a man, divorced at the time of claiming the State Pension, should be entitled to the full amount from the date of claim. In addition, I would be grateful if you would review the decision to exclude divorced people from the LEAP exercise given the progress you have now made in correcting underpayments to two groups (married women and over-80s)."

The DWP has been given until May 1 to reply. It initially said it had "no evidence of systemic error due to missing action taken on notifications of divorce" but the Committee is asking it to reconsider the decision not to check for such cases.

Former pensions minister Steve Webb, who now works for consultants LCP, said: "Given the massive scale of errors on State Pensions for married women, widows and the over-80s, it is stretching belief to think that divorced people's pensions have all been worked out perfectly.

"A particular issue is cases where DWP was notified of a divorce post-retirement and whether this always resulted in a State Pension reassessment. For any given individual, the difference could be very substantial, especially where a woman had a poor NI record, but her ex-husband had a full record. DWP should do a thorough search for potential errors of this sort."

How could divorce affect your State Pension?

Mr Webb says that under the old State Pension system (for those who reached pension age before 2016), there were two main ways in which a divorced woman could benefit from her ex-husband's contributions:

1) Where a woman divorced and did not remarry before pension age, her State Pension at retirement could take account of her ex-husband's contributions up to the date of their divorce. Where his National Insurance record was better than hers, she could 'substitute' his record for that period. Provided the woman gave full details of her ex-husband at retirement this calculation should be done automatically.

2) Where a woman divorced after retirement and notified DWP, it should then reassess her State Pension, taking account of her ex-husband's contributions right up to her retirement. In many cases, this would entitle her to a full basic State Pension.

In the case of men, since 1979 they have been able to substitute the contributions of an ex-wife when being assessed for State Pension. Mr Webb said: "As most men get a full basic State Pension in their own right, this has not really been relevant to most men, but there could be individual cases where a man needed to use his ex-wife's contributions and this was not done correctly."

How many people have had State Pension backpay so far?

This is the latest update of the Legal Entitlements and Administrative Practice (LEAP) exercise to correct State Pension errors. It was published by the DWP on March 21 and shows cases reviewed in each of the three affected categories up to February 29, 2024.

Married (Category BL pensions)

Those with insufficient National Insurance contributions to qualify for a basic State Pension may be entitled to a pension through their husband, wife or civil partner's National Insurance contributions. This is called a Category BL State Pension and can give them a basic State Pension of up to £101.55 at 2024/2025 rates.

People who are married or in a civil partnership who reach State Pension age before April 6, 2016 may be entitled to a Category BL uplift, without the need to make a separate claim. This may be the case if their husband, wife or civil partner became entitled to their State Pension on/after March 17, 2008, or had already reached State Pension age before claiming their State Pension.

Cases reviewed: 317,955

Underpayments identified: 43,367

Average arrears payment: £5,713

Total amount repaid: £243.8m

Widowed

Those who are widowed and are getting a basic State Pension of less than £169.50 a week at 2024/2025 rates can also derive basic State Pension from their late spouse or civil partner. This could increase their pension to that amount. They can also inherit between 50 per cent and 100 per cent of any additional State Pension and 50 per cent of any Graduated Retirement Benefit.

Cases reviewed: 298,099

Underpayments identified: 21,175

Average arrears payment: £12,486

Total amount repaid: £262.3m

Over 80 (Category D pensions)

People who reach age 80 and are getting no basic State Pension or a basic State Pension of less than £101.55 a week can qualify for a Category D State Pension increasing it to that amount.

Cases reviewed: 89,634

Underpayments identified: 32,474

Average arrears payment: £2,192

Total amount repaid: £65.5m

Two further reviews of State Pension underpayments are also taking place, relating to missing information on people's National Insurance records. Thousands of people were given less State Pension than they were entitled to receive, either because of missing Home Responsibilities Protection (HRP) or Universal Credit National Insurance issues. DWP confirmed this week that it started sending out backpayments of £5,000 on average earlier this year.

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