Yahoo News HMRC writing to people who could claim a share of £1.5bn
HM Revenue and Customs (HMRC) is reaching out to individuals, a large percentage being older women, to determine if there are any gaps in their national insurance (NI) records that could potentially impact their state pension.
The gaps may be a result of missing home responsibilities protection (HRP), a scheme aimed at safeguarding the state pension entitlements of parents and carers.
From April 6, 2010, NI credits replaced HRP, and from autumn 2023, HMRC began contacting those affected, based on their proximity to the state pension age, with individuals over that age taking precedence. Some of those impacted may have passed away, in which case their families can verify eligibility and apply for any owed arrears.
The Department for Work and Pensions (DWP) is collaborating with HMRC to identify affected individuals and rectify their records to ensure they receive the correct state pension amount.
The National Audit Office (NAO), responsible for overseeing public expenditure for Parliament, indicated that it's believed around 210,000 individuals have been underpaid £1.3bn of their state pension due to historic issues connected to HRP. It highlighted however, the DWP's estimate is "very uncertain" and the total could be anywhere between £310m to £1.5bn.
If someone claimed child benefit before May 2000 and did not provide their National Insurance (NI) number on the claim, they may find that their NI record does not reflect the correct number of qualifying years for Home Responsibilities Protection (HRP), potentially impacting their state pension. The Government has acknowledged that women in their 60s and 70s are most likely to be affected by this issue.
HM Revenue & Customs (HMRC) is actively reviewing NI records to identify individuals who might have been entitled to HRP from 1978 to 2010 but lack it on their records. Those fitting the criteria will receive correspondence from HMRC to determine their eligibility for a claim, which can be made online if confirmed.
The Department for Work and Pensions (DWP) will reassess state pension entitlements and inform individuals of any owed arrears. Sir Steve Webb, ex-pensions minister and current partner at LCP (Lane Clark and Peacock), commented: "Missing out on protection for time at home with children could make a huge difference to a mother's pension entitlement, and lump sum payments of arrears could run into many thousands of pounds for those who are affected."
"I hope that this correction process will be completed as quickly as possible."
Sir Steve further remarked on the magnitude of the oversight: "The scale of these errors is huge. It is shocking that so many women have been underpaid so much money. This makes it essential that things are put right as a matter of urgency."
LCP has in the past launched a campaign and website dubbed "mothers missing millions" lcp.uk.com/mothersmissingmillions to raise awareness and assist people identify if they stand affected. AJ Bell's head of retirement policy, Tom Selby, mentioned: "The most important thing now is that those who have been underpaid are identified as quickly as possible and put back in the position they should have been."
He further added: "Tragically, it is inevitable some will have died before they can receive the compensation they are owed."
Meanwhile a Government spokesperson shed light on the matter, saying: "We have identified and are correcting an issue related to the historical recording of home responsibilities protection on the national insurance records for people who first claimed child benefit before May 2000. Most people's records will be unaffected, and we will shortly be launching a new online tool to help people check whether they need to claim. HMRC will also begin writing to those likely to be affected from the autumn."
Adding onto this, they affirmed: "Our priority is ensuring everyone receives the financial support to which they are entitled, and state pension underpayment rates due to official error remain low at 0.5% of expenditure. Where errors do occur, we are committed to fixing them as quickly as possible."
