According to Sir Steve Webb, a former LIb Dem pensions minister, new evidence indicates that mistakes are still being made when it comes to State Pension payment claims.
State Pension Errors Could Result in Back Payments of Up to £2,000
In order to fix previous State Pension errors that relate to certain categories of people, including widows and widowers, the Department for Work and Pensions (DWP) launched a Legal Entitlements and Administrative Practice (LEAP) corrections exercise back in February 2021, as reports the Daily Record.
Yet, Sir Steve Webb, stated that new evidence shows that a recent group of cases still contains incorrect data. He said those who claim the New State Pension, who were already widowed during their retirement, may not have received the full amount and could be due a back payment.
He further implied that four separate individuals had contacted him, stating they were denied the inherited State Pension upon retirement they retired and were informed by the DWP either through letters or over the phone that they did not qualify for it.
He clarified that the information provided in all four cases was incorrect and arrangements have been made for an increased State Pension, along with the establishment of arrears. In two of the cases, the underpayment was more than £2,000 annually, which could result in a shortfall of £40,000 throughout a standard retirement.
Sir Steve said one of the persons who contacted him had said: “I personally would like to see more people come forward to claim what is rightfully theirs.”
Who Could be Impacted by the Recent Underpayments?
According to Sir Steve, those affected generally include widows or widowers who claim their New State Pension if either the deceased spouse reached state pension age before April 6, 2016 or if the spouse passed away before that date.
The specific amount of inherited State Pension varies based on personal factors, but could be higher if the deceased spouse was employed instead of being self-employed. Additionally, if the widowed spouse is not getting a widow’s pension from a company's pension scheme, this may impact the amount of inherited state pension due.
Sir Steve stated: “Having had to spend years checking hundreds of thousands of historic State Pension calculations for errors, you would hope that DWP would be making sure that new claims are handled correctly. But we have found worrying evidence that this is not the case.
“There seems to be a particular problem for people who are widows or widowers when they claim their State Pension. In some cases DWP seems to have failed to automatically add any inherited State Pension they were due from a late partner.
“These cases may well be the tip of an iceberg.”
LCP has launched an online tool to help individuals understand the type of State Pension they are inheriting in addition to their own state pension.
Sir Steve added: “The Department needs to launch an urgent investigation into the scale of this problem.”
A spokesperson for the DWP asserted: “We want to ensure pensioners receive all the support to which they are entitled and have a tool to help them understand what State Pension they can inherit.
“Delays can occur to a customer’s State Pension award when not all the information we need is provided. In these cases, we will make a State Pension award based on the customer’s own National Insurance record until we have the required information.
“Once we have the necessary documentation, we will then revise the customer’s claim as soon as possible.”