Hundreds of thousands of elderly married women have been underpaid pensions owing to civil servants’ “inevitable” errors, the National Audit Office has found.
A new report by the Government’s spending watchdog found that more than £1 billion has been underpaid to 134,000 pensioners because the rules are complex, IT systems are outdated and unautomated, and the administration of claims requires a high degree of manual review and understanding by case workers.
It found that the level of human errors was “almost inevitable” given the complex rules and high degree of manual review necessary when assessing claims.
The errors affect pensioners who first claimed the state pension before April 2016, do not have a full National Insurance record, and should have received certain increases in their basic state pension.
While the underpayments for most of these people continue, the earliest that has been found is a case of someone who was underpaid from 1985 to 2021.
According to the office’s figures, those women affected include 53,000 married women, 44,000 widows and 37,000 over-80s.
A larger number of married women missed out on a one-off increase in payments as the process of claiming an additional amount of state pension, based on a husband’s records, was only made automatic in 2008.
Those affected are due an average £8,900, while one in eight are due more than £40,000 windfalls to make up for the wrongful underpayment.
Dame Meg Hillier, the chairman of the Commons’ public accounts committee, said: “Many pensioners – most of whom are likely to be women – have been short-changed by thousands of pounds which they are still yet to receive many years later.
“DWP [the Department for Work and Pensions] must provide urgent redress to those affected and take real action to prevent similar errors in future.”
Frontline staff ‘lacked training on complex cases’
The report also found that DWP’s caseworkers often failed to set, and later action, manual IT system prompts on pensioners’ files to review the payments at a later date, such as their spouse reaching state pension age or their 80th birthday.
Caseworkers also often made errors when they did process prompts because frontline staff found instructions difficult to use and lacked training on complex cases.
The DWP, which was responsible for the widespread error, will hire a further 320 members of staff by January 2022 to speed up the correction of its mistakes, with admin costs totalling £24.3 million.
It has pledged to reimburse all those who have been left out of pocket and said it expected to do so by the end of 2023. So far, 10,000 people have received payments worth a total £74 million.
However, more than 20,000 female pensioners are expected to fall through the cracks of the Government’s pledge to rectify state pension underpayments, as the National Audit Office found that one in eight cases reviewed during the corrective exercise had been done incorrectly, where staff had wrongly calculated the pensioner’s entitlement for a second time.
Of the 134,000 due money, 94,000 are still alive and 40,000 have died and payments could be made to estates. But an estimated 15,000 pensioners will be left out and never reimbursed by the Government because it has said it won’t be able to trace or pay the pensioners or their next of kin.
Sir Steve Webb, the former pensions minister who has led the campaign to raise awareness, said: “It is very worrying that errors are still being made as part of the correction exercise. The DWP also needs to do everything it can to track down the families of pensioners who have sadly died and never received the pension they were due.”
Caroline Abrahams, the charity director for Age UK, said: “This disastrously poor practice has denied many pensioners who are living on low incomes the full amount to which they are entitled, which in turn is undermining their day-to-day standard of living. We urge the DWP to proactively track down and reimburse all those affected as a top priority.”