State pension for more than 100,000 retirees had been incorrectly paid due to a fault in the Department for Work and Pensions’ (DWP) system. Over the past three years, the department has been endeavouring to correct these historic underpayments.
Making thousands of back payments to people who were unjustly underpaid, the DWP has revealed it’s on track to finish to resolve the issue by the end of the year. So far, many of the 119,050 pensioners affected have been paid with average payments ranging between £2,202 and £11,905.
There are three main groups of retirees who hit state pension age before April 6, 2016, that were affected the system glitch:
- Married or people in civil partnerships
- Widows
- Pensioners over the age of 80
Most of the DWP’s work over the past few years has been identifying the individuals that have been affected and calculating the amount they are due in back payments. Complicating this equation is because of the underpayments some people received an overpayment of other benefits like Pension Credit.
So far, all of the affected married women and pensioners over the age of 80 should have been repaid and the final few people in the widow category are due to get what they’re owed before the start of 2025. The system error was revealed to the DWP in 2021 through a Legal Entitlements and Administrative Practice exercise, known as a LEAP exercise, and became the biggest underpayment correction in the department’s history with a total of £736 million owed but there are some other state pension underpayments the department is addressing too.
The Home Responsibilities Protection affected some people on the old state pension system as it didn’t properly record this protection on their National Insurance records. Roughly 5,000 of these underpayments have been identified this year with an average payout of £7,859.
People affected by this, primarily women who might have been entitled to HRP between 1978 and 2010, should have received a letter from HMRC. Finally, one last group of people potentially affected by other state pension underpayments is those claiming Universal Credit.
Due to a system issue between 2017-2018 and 2022-2023, people who were due to get National Insurance credits through their benefit may not see them properly translated to their National Insurance record. This could affect how much state pension they receive. The quickest way to check for underpayments is to contact the Pension Service on 0800 731 0469.