The Department for Work and Pensions (DWP) has admitted to a significant weakness in relation to pension contributions for Universal Credit claimants, with this recent revelation shaking many thousands of people.
Possibility of Backdated Universal Credit Payments
In an exclusive scoop yesterday, This Is Money showed that those who put money into pensions while unemployed may be entitled to larger sums.
It has been reported that the DWP wrongly told claimants that their contributions would not be taken from wages when assessing Universal Credit entitlements. As a result, incorrect information concerning amount of benefits was given.
Workplace pensions are often obligatory for many Universal Credit recipients, or they opt for private ones through voluntary contributions. Therefore, these must be deducted before working out how much an applicant receives in universal credit.
A DWP spokesman acknowledged the error in a statement to This is Money: ”We have apologised to these claimants and are working with them to ensure their future Universal Credit entitlement is correct.”
The Department of Work and Pensions confirmed that pension contributions have to be deducted before working out Universal Credit. People making claims must show their pensions deductions. They pointed out that Jobcentre staff regularly attend training sessions so they can handle applicants’ claims accurately.
Steve Webb expressed his unease, saying, “Paying into a pension has many attractions, but particularly for people on Universal Credit. This is because your pension contribution should be deducted from your wage before they work out your benefit, giving you a bit extra each month. So it is shocking to hear from readers that DWP has misled them in writing, claiming that personal pension contributions cannot be deducted.”
Webb is glad the issue was resolved for readers, but is alarmed about wider implications. “Makes you think just how many others were misguided? We will keep on inquiring until we are certain that all kinds of pension contributions have been rightly subtracted from payments being received by millions of working people who get universal credit.”
According to Webb, this error might affect thousands and brings up whether DWP is accurately treating other types of pension contributions.