HM Revenue and Customs (HMRC) has recently confirmed that over 370,000 letters have been dispatched to older individuals, predominantly women, advising them to review their State Pension as they may be receiving less than they are entitled to. According to data released by the Department for Work and Pensions (DWP), the average arrears payment is approximately £7,859.
In 2022, the DWP discovered several State Pension cases where it seemed that historical periods of Home Responsibilities Protection (HRP) were absent, resulting in incorrect State Pension payments. This issue was found to affect the National Insurance records, managed by HMRC, of some individuals both below and above the State Pension age.
To address this, the DWP and HMRC initiated a Legal Entitlements and Administrative Practice (LEAP) corrections exercise to identify and invite potentially affected individuals to apply, correct their records, and receive both arrears and ongoing revised State Pension payments.
The latest data reveals that 493,813 people have utilised the online tool on GOV. UK to check if they are missing HRP from their State Pension.
Those affected by the error are expected to receive any back payments by the end of this year. The DWP has also previously stated that those closest to the State Pension age in their 60’s and 70s are being prioritised with letters, however, anyone who believes they may have been affected can verify their eligibility online using the self-identification tool on GOV, reports the Daily Record.
As of the end of September last year, HMRC had processed 37,289 applications from individuals over State Pension age and 5,428 from those under 66. To date, the DWP has disbursed £42 million in arrears payments.
The issue at hand is the underpayment of Home Responsibilities Protection (HRP), with the DWP estimating it underpaid between £300m and £1.5 billion due to errors in recording HRP. The HRP scheme was designed to safeguard the State Pension entitlements of parents and carers, and was replaced by NI credits from April 6, 2010.
HMRC is using NI records to identify as many people as possible who may have been entitled to HRP between 1978 and 2010 but have no HRP on their NI record.From May 2000 onwards, including a NI number on claims became mandatory, so those claiming after this point will not have been affected. It’s estimated that tens of thousands of people are due an average of £5,000 in back payments.
Both HMRC and DWP are running a broader campaign to ensure everyone potentially eligible is aware of the corrections exercise. Before starting the online HRP check, you’ll be asked if there are gaps in your National Insurance record. If you can’t find your National Insurance record online or don’t know the answers to any of the questions, you can select ‘Do not know’ and you’ll be guided on how to obtain this information. The text then explains how to use the online HRP tool.
You may still be eligible to apply for Home Responsibilities Protection (HRP) for full tax years (6 April to 5 April) between 1978 and 2010, under certain conditions. You can also apply if, for a full tax year between 2003 and 2010, you met specific criteria.
According to GOV. UK guidance, most people automatically received HRP if they fell into certain categories. If your partner claimed Child Benefit instead of you and you reached State Pension age before April 6, 2008, you cannot transfer HRP. However, under certain circumstances, you may be able to transfer HRP from a partner with whom you lived.
This will be converted into National Insurance credits. If you were a married woman or a widow, there are restrictions on claiming HRP for any complete tax year.
If you were caring for a sick or disabled person, you can only claim HRP for the years you spent caring for someone with a long-term illness or disability between April 6, 1978 and April 5, 2002. They must have been receiving one of the specified benefits for a minimum duration each tax year.
Applications for Home Responsibilities Protection (HRP) are still open even if you’re over the State Pension age. However, any increase in State Pension that may have been due for previous years will not usually be paid.
If you were receiving Carer’s Allowance, there’s no need to apply for HRP as you’ll automatically receive National Insurance credits and wouldn’t typically have needed HRP. If you were a foster carer or caring for a child of a friend or family member, you must apply for HRP if, for a full tax year between 2003 and 2010, you met certain conditions. .
For those who reached State Pension age on or after 6 April 2010, any HRP you had for full tax years before April 6, 2010 was automatically converted into National Insurance credits, if you needed them, up to a maximum of 22 qualifying years. A full overview of HRP can be found on GOV.UK here.