In 2021, the Department for Work and Pensions (DWP) embarked on a mission to right past mistakes after a Legal Entitlements and Administrative Practice exercise revealed approximately 119,050 pensioners were getting less state pension than they deserved. The exercise delved into suspected underpayments affecting 3 specific demographics of retirees.
The historical payment error is being addressed with backdated payments with the average affected retiree having received a staggering £11,905. The DWP has confirmed they have finished paying back two affected demographics; married women and civil partnerships and those over the age of 80.
Next up, the department hopes to finish paying back all of the widowed cases by the end of the year, which would wrap up the last group affected by the error, and they’re seemingly on track to meet this goal. This is 2nd biggest group affected by the underpayments with 39,706 cases identified by the department.
The average arrears for widowed retirees has also been the highest at roughly £11,905 average, just over a year’s worth of new state pension. Married retirees received an average backdated payment of £5,591, around 6 months worth of state pension, and those over the age of 80 received roughly £2,202 on average, or 9 weeks worth of new state pension.
The DWP has been systematically examining cases to identify potentially eligible retirees since January 2021 and has remained committed to the review process ever since. The department initially spread its focus across all 3 groups but with only 1 remaining it’s expected that the significant error will be fully redressed before the end of the year.
As part of the update, the DWP highlighted that for some cases an underpayment of state pension correlated with an overpayment of other benefits. For example, Pension Credit which is only available to retirees on low income.
In these cases the department noted: “There was no net underpayment to the individual.” Additionally, there have been some cases where the retiree who was underpaid has unfortunately died and the department hasn’t been able to identify which estate to pay the arrears to.