Adding Insult to Injury: How another regulator dumped on 50swomen pensions complaints

Joanna Wallace, Independent Case Examiner for the DWP Pic Credit: Ombudsman Association

This is Joanna Wallace. She is the Independent Case Examiner for the Department for Work and Pensions.

Her latest annual report for 2020-21 – the one for the last financial year has not yet been published promises “a free independent complaints review service for the Department for Work and Pensions (DWP) and their contracted services “. It says it will “act as an independent adjudicator if a complainant considers that they have not been treated fairly or have not had their complaints dealt with in a satisfactory manner; and to support service improvements by providing constructive comment and meaningful recommendations.”

Her report also boasts “To deliver a first rate service provided by professional staff.”

For its handling of 50swomen pension complaints it has provided nothing of the sort. To investigate this I have drawn on the findings of the confidential Parliamentary Ombudsman’s second report into maladministration over the delay in the payment of women’s pensions. There has also been an alleged development that suggests that she has destroyed all the evidence submitted by complainants.

For a start its claim to be independent is questionable. It works under a contract set by the DWP and has to apply DWP rules set by ministers in Parliamentary legislation. It has no independent web address using the dwp one. It is based in Bootle round the corner from Liverpool jobcentre and in the same road as the Health and Safety Executive.

But more serious is its record. In 2020-21 4,205 people complained to it about the DWP everything from pensions, universal credit, disability benefits to child maintenance. Of these nearly 3000 were rejected without any investigation and only 146 of the remaining 1013 cases were fully upheld. Another 338 were partial upheld and 350 were rejected. A number of others fell by the wayside.

Rob Behrens, Parliamentary Ombudsman

So it is perhaps not surprising that 50swomen would be given short shrift by Ms Wallace. The Ombudsman’s report about their handling of the women’s complaints is very revealing. The report says:

“ICE told us it received ‘an unprecedented volume’ of complaints about DWP’s communication about State Pension age, and it received no additional resources to deal with them. ” In other words the DWP made doubly sure it did not have the money to properly investigate

The report said; ” the vast majority of complainants used a standard template. ICE selected a ‘lead case’ (one of our sample complainant’s complaints) for investigation and then applied its findings in that case to each of the cases it investigated.” In other words just one complainant was examined in detail and its findings applied to the rest. Altogether 192 were looked at, the remaining 2300 complaints were never examined once a judicial review was granted by the courts to look into the failure of the DWP’s actions and inequality of its policies towards 50swomen over this issue.

The complainants case fell at the first hurdle since ICE took as standard what the DWP later justified in the judicial review that the 1995 Pensions Act made no provision for it to tell anyone. Once the DWP took that view ICE had to abide by its contract with the DWP.

As the Ombudsman reports : “It found there was no requirement for DWP to inform women of changes to their State Pension age, and that DWP had no standards for communicating changes about State Pension.”

It concluded: “as DWP had not committed to communicating changes to State Pension age individually to those affected, and given that accurate information was available on request, DWP not notifying women personally from 1995 onwards did not amount to maladministration. “

Women complaining to ICE thought they were being treated as liars

What is worse is ICE’s attitude towards 50swomen who complained they had never received the letter

which some complainants saw as treating them as liars.

The Ombudsman reports: “ICE concluded that it was more likely than not letters had been sent to complainants, at the correct address,” citing when people were written to in 2012 – some 17 years after the legislation was passed.

The ombudsman reports: “DWP has no record of who it wrote to or when, meaning that information was never available to ICE.  So, there is not enough evidence to support ICE’s conclusion it was more likely than not DWP wrote to complainants who have said they never received a letter.  What ICE should have said in the circumstances is that it could not determine whether or not DWP sent letters to the individual complainants at the time it wrote to people in their age group. “

The Ombudsman then lets ICE off the hook by saying ,” we do not think the shortcomings in its handling of this issue were significant enough to be a failure to ‘get it right’ on this occasion.”  

There is one extraordinary allegation following this report which is being investigated by WASPI.

According to Kay Clarke, who is the founder member of 1950sWOW (Women of Wales)and beyond, co -founder PP4J & Cardiff WASPI, ICE have now admitted in a letter that it has destroyed all 2,500 records of complaints.

She told me: “I can give assurance that the letter exists and quite categorically affirm the facts.”

I have not seen the letter but I have contacted ICE for a comment about this. They have not replied nor even acknowledged the email I sent.

If this is the fact the combination of the DWP not recording who complained to them and ICE destroying all the evidence of their complaints will make it very difficult for any of the 50swomen to claim anything should eventually they be awarded compensation by the Ombudsman.

Yet another hurdle in this sorry saga has been put in place.

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Coffey sneaks through tough plan to push 114,000 Universal Credit claimants into jobs while Parliament is in recess

Therese Coffey :Pic credit: gov.uk

The Department of Work and Pensions is to tighten the rules significantly to force 114,000 existing Universal Credit claimants into work as job vacancies soar across Britain.

She is changing the rules so far more people will have to go on what is known as an intensive work search regime where they will be monitored continually by work coaches on how many jobs they have applied for and why they didn’t get them.

Therese Coffey has been planning to do this since January this year and consulted the Social Security Advisory Committee, chaired by the architect of Universal Credit, Stephen Brien, on January 26.

Ian Caplan, DWP’s Director of Employment, Youth and Skills

A letter to the committee from Ian Caplan, director of employment, youth and skills said:

“The Secretary of State wishes to bring in the change as soon as practically possible…for providing immediate support to low-earning households to increase incomes at a time of immense cost of living pressures…. By bringing these regulations into force as quickly as possible, including by laying the regulations in recess, the Department can start making the operational preparations”

SSAC kept decision secret for 8 months

The committee approved the idea on February 4th but agreed to keep the decision secret until last week when it published the minutes of a meeting between DWP officials and the committee.

To make the change the government is using a regulation to uprate what is known as the Administrative Earnings Threshold – a device which sets the level of benefit and earnings dividing those who only receive ” a light touch” regime – ie occasional checks whether they are seeking work – from their local job centre and those put on intensive work search programmes. Those who refuse or don’t co-operate properly with face benefit cuts as a sanction.

It will move the level from £355 to £494 a month for a single claimant and from £567 to £782 a month for a couple. At present some 250,000 people covered by the intensive work search programme are in work – this will increase the number by 50 percent. The government justify it by saying the new level brings it into line with recent rises in the national minimum wage for those in work.

What is more interesting – and perhaps why the minutes were withheld – is the question and answer session between the committee members and civil servants.

While the overall aim of the scheme is to get a higher income for the unemployed – by getting them work or more work for those in part time jobs – the DWP admit they have another agenda. Questioned about the current job vacancies level encouraging this move officials said: “the vacancies position the labour market is considered by some to be hot which could be driving inflation.”

In other words by getting more of the unemployed into work, employers would have a bigger pool of labour and would not have to offer higher wages or even compensate people for the rising cost of living.

Will the unemployed be recruited as strikebreakers?

There may now be an even more compelling reason as Therese Coffey wants this to be law from September 26, since the government plans to use agency workers to break the coming strike wave. What would suit ministers would be if the unemployed could be drafted in as agency workers leading to confrontation with striking workers on trains, buses, schools, the NHS, and the post office with shouts of ” scab” and bringing the police in to make mass arrests of strikers. A reminder of the miners’ strike.

There were other gems from the minutes – which in my view revealed the attitudes of the DWP and committee members

There was much questioning about the effect this could have on 16-24 year olds which suggested the programme could work for them. There was concern about the disabled – and an admission by the DWP that except in Yorkshire it had done hardly any research on how this could affect them.

DWP building

What was tellingly missing was the complete lack of interest from the DWP or committee members about the effects on people over the age of 50 and 60. The DWP didn’t even bother to give the committee a breakdown on them. But it is a fact that the rising of the pension age to 66 -particularly among women has seen a big increase in numbers on Universal Credit who can’t get jobs.

I really wonder whether this is prejudice. Women like Therese Coffey, who is 50, have had stellar careers and I wonder if they think women born in the 1950s and 1960s who are on the dole are failures or nonentities, don’t cause them a lot of trouble and don’t turn physically aggressive like some men. So they can be safely ignored. Certainly any thought about their plight or indeed any old person was spectacularly missing from discussion about this new drive.

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DWP ignores the Parliamentary Ombudsman and refuses to compensate 118,000 disabled people hit by benefit maladministration

Worry precedent at the Department for Work and Pensions

The Department for Work and Pensions has set a worrying precedent for millions of people hoping to get compensation if civil servants get their benefit and pensions payments wrong or don’t inform them correctly by refusing to pay them a penny.

The decision also shows up the weakness of complaining about maladministration to the Parliamentary Ombudsman, Robert Behrens, in cases involving the ministry as it ignores his rulings.

The PHSO’s strong Youtube video on this case

This particular case involved 62 year old Ms U, who lives alone in London borough of Greenwich -one of the few authorities to still have a welfare rights service – who was on incapacity benefit and was moved on to the new employment and support allowance in 2012. This is aimed to be paid to people who cannot work because of severe health problems and is paid at two levels. The lower level is based on a person’s national insurance contributions and the means tested higher level which include premiums and access to other benefits like free prescriptions in England.

Ms U should have fitted into the second category. Ms U suffers from paranoid schizophrenia, arthritis, hypertension, and Graves’ disease an autoimmune condition. But she was wrongly put in the first category. As a result she lost access to free prescriptions and missed out in getting her home insulated under the Warm Homes scheme.

Ms U couldn’t afford to heat her home

Her representative said:” She could not afford to heat her property and could not afford to buy appropriate food to keep healthy. He said Ms U had poor mental health during that period and highlighted links between paranoid beliefs and depression and economic deprivation.

As far as her physical health was concerned, her hair fell out and she lost a lot of weight. Her representative said that since 2012, Ms U’s health had declined markedly: she had recently had a bypass operation, had deep vein thrombosis and poor blood flow in her legs and was due to have a toe amputated.”

Her underpayment went on for over five years from May 2012 to August 2017 before finally her arrears which then added up to £19,832.55 were paid. But she felt she was also entitled to compensation as the error had been committed by the ministry. The Ombudsman agreed in a report she had suffered an injustice and said the Department should pay her £7,500 compensation and interest on the lost benefit of over £19,000.

NAO report forced the department to find 118,000 other cases

She was not alone. An investigation by the National Audit Office found that some 118,000 disabled people had suffered the same fate prompting anger among MPs on the Commons Works and Pensions and the Public Accounts Committee at this huge error. Some £600m has had to be paid in arrears.

The Ombudsman also recommended that the rest of the 118,000 should also get compensation for maladministration and the department should take a proactive approach to deal with this.

It has now emerged that the department has refused to do this – despite the Ombudsman’s recommendation. I am indebted to Professor Robert Thomas at Manchester University and CEDAWinLAW who spotted this in a freedom of information request two days ago. See @RobertThomas223 and his tweet thread of August 5.

He said in a series of tweets:

“This issue is important because @dwp underpaid these people their benefit entitlements and many will have suffered injustice as a result. @PHSOmbudsman recommended that @DWP proactively compensate them. It refused. Affected people must approach DWP instead.

“But many people lack the confidence, stamina and knowledge to seek redress from government. Also, this is a largely vulnerable cohort of people. The result: unremedied injustice because of @dwp

“The underlying issue is, of course, money and almost certainly HM Treasury’s refusal to fund compensation. But the DWP can present itself as being fair: “anyone can contact us” while also knowing that few affected people will actually do so in practice. “

Sir Stephen Timms, chair of the Commons Work and Pensions Committee

Since seeing this I have contacted Sir Stephen Timms, Labour chair of the Commons Works and Pensions Committee, to see if, as they promised the Ombudsman, the DWP had alerted him to the decision. Initially he said he could not recall getting this and promised to investigate what has happened.

There is another big issue. This could impact on the Waspi campaign and the all party state pension inequality group of MPs to get compensation for women through a report from the Ombudsman. If after the Ombudsman says compensation is due the DWP follows this practice for the 3.8 million – six people will get compensation and the remaining 3.6 million still alive will have to write individual letters outlining their case to the ministry for any money due which will take even more time to resolve. You have been warned.

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DWP dumps on disabled claimants by rejecting plans to give them more say and rights over benefits

Chloe Smith, Minister for Disabled People, Health and Work

The Department for Work and Pensions has turned down some innovative proposals from its own advisory body, the Social Security Advisory Committee, to give disabled people more say in the benefit system.

The response to a report from the committee made over a year ago came in the last few days of the Parliament with an explanation from Chloe Smith, the minister.

Not only does her reply do an injustice to disabled people but heavily reflects the corporate approach inside the ministry which in my view, does not treat people claiming benefits as independent human beings who might have something to contribute to the running of the service.

Having a protocol for engagement is ” bureaucratic “

Typical of today’s government responses Chloe Smith cherry picks parts of the report which fit in with DWP’s grand corporate plan to digitalise everything – while ignoring other more challenging proposals to help the disabled.

The SSAC report- full details here – suggests the government should formalise engagement procedures with disabled people – giving them a chance to put their own views into how the benefit system could help them. The government rejects this as ” bureaucratic” while claiming it engages in meaningful discussions. The problem with this is that the government chooses what it wants to consult about and ignores issues it doesn’t.

The second recommendation was that the ministry should provide regular updates on its engagement with disabled people. The ministry rejects this on the grounds it already provides details of quarterly ministerial meetings with who attended under existing transparency rules ( I wonder how many disabled people search this out ). It certainly doesn’t want this extended to officials using the rather curious argument that “we need to recognise that some stakeholders or users may not want to be identified as having worked with the Department and we do not want to compromise open and honest dialogue.”

Really? Given the ministry publish the people who attend ministerial meetings on the disabled this seems rather contradictory.

A panel for disabled people ” not value for money”

The third rejected recommendation is a proposal to recruit some representative disabled people who experience the benefit system to act as a panel to raise issues. The Department responded:

 “Creating and maintaining a representative panel across all disability benefits is unlikely to offer value for money as it would require continuous oversight and recruitment. Given the wide range of policies the Department is responsible for, which will be of interest to different groups in society, we think having the flexibility to tailor our engagement will lead to more meaningful insight than using a standing panel. Any findings from such a panel would only be indicative and could not be used for robust evaluation to assess the impact or effect of any single policy intervention.”

The ministry did accept the fourth recommendation – the use of accessible technology – which would allow video interviews between staff and claimants – and is being trialled for Universal Credit . But that fits in with its modernisation plan.

It went on to reject a proposal to include a clause insisting on how private contractors – which do a lot of work for the DWP in assessments and interviews for disabled people – should engage with disabled people. This is a controversial issue – the Northern Ireland Ombudsman is currently investigating allegations of bad practice by contractors assessing people for benefits. But the department claims to include it would be subject to legal challenge by contractors during the bidding process for the work. Frankly if the private firms don’t want this if they want to do this type of work, it suggests to me their motives for doing the job are questionable.

The ministry also accepted a recommendation that its services should be more accessible for disabled people – and listed achievements in that area – again in line with their corporate plan.

Finally the ministry half accepted a recommendation for more leadership inside the department to enable disabled people and other claimants to have greater input but rejected appointing a non executive director to co-ordinate such a process. Instead it said it should be Chloe Smith, the present minister should do this as part of her job.

Minister’s complacent response

The covering letter from the minister said: “I am pleased to see the progress we have made in engaging with disabled people recognised in the Committee’s report. I share the Committee’s view on the importance of keeping the voices of disabled people at the heart of health and disability policy development and delivery. However, I do not agree with several of the Committee’s recommendations because I believe that we can achieve the outcomes of sustained, meaningful engagement with disabled people in ways other than those identified in the report.”

In my view the report reflects the current complacency and culture in the ministry – shown by the lack of engagement in the past over the raising of the pension age for 1950s women and the management’s top down attitude in not wanting to engage directly with pensioners, mainly women, who have been underpaid their pensions.

Incidently, in researching Chloe Smith for this article I came across a rather extraordinary story about her marriage partner, Sandy MacFadzean, a financial consultant. In September 2020 he dismissed those suffering from Covid 19 as having a ” mental illness”. He held such strong views that he went on a march run by Piers Corbyn when gatherings of more than 30 people were banned and retweeted a poster for it on his now closed Twitter account condemning social distancing, wearing face masks and opposing the mass vaccination of the population. The story was picked up by the Eastern Daily Press.

The minister defended his right to freedom of speech but said she disagreed with his stance. The discussions in their household must have been fascinating during the long pandemic.

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Can the DWP’s newest feminist recruit give the ” shambolic” ministry a more people friendly face?

Elizabeth Fairburn,(right) now the Department for Work and Pensions new customer experience director

Last week I watched the polite questioning by MPs of the top officials from the Department of Work and Pensions about their latest published accounts – which I have already lambasted in a blog here.

At this hearing of the Commons Public Accounts Committee – see this link – once again Peter Schofield, the permanent secretary – had to apologise to the nation’s pensioners for the ministry’s failure to rectify the underpayment of pensions to hundreds of thousands of pensioners, some who may still have to wait until 2024 to get their money. He promised 1000 more staff -having started with just 100 people – to sort out this scandal.

Once again – it is the 34th year in a row – the top officials had failed to balance the books – because of benefit fraud and error reaching record levels. Again it was promised that this will be sorted – we shall see whether this is really true next year.

Peter Schofield, DWP permanent secretary

But the most interesting aspect of the hearing was a new face on the block. She is Elizabeth Fairburn, who is the customer experience director at the DWP. She has been recruited from Direct Line Insurance as the head of claims response – where she deals with insurance claims from customers. She is quite obviously not a career civil servant unlike Peter Schofield, her boss whose cv shows, apart from a secondment to 3i, is a mandarin to his fingertips.

What is even more interesting she is a firm campaigner for women. She recently gave an interview to mark International Women’s Day this year with Gatenby Sanderson, a head hunting agency recruiting executives for the public sector ( recent appointments included the chief executive officer of the National Cancer Research Institute and the people’s director for the London Fire Brigade).

I have reproduced it at the top of this blog. As well as talking about her career, she is committed to equal pay for women, proper career paths for women who return to work after looking after children and most importantly women having real self belief in themselves and not being put down by men. She also is a coach for women to believe in themselves.

Can Elizabeth Fairburn do anything for claimants and pensioners?

But can she do anything for the millions of claimants and pensioners who have to endure using the DWP? She admits in the interview that she knew little about the working of the organisation.

At the hearing she made some interesting comments. She told MPs:

:”We are mapping out the plans and trying to piece things together. It is a big Department, and I am trying to get my head around a lot of things. I can see some real opportunities in how we could use different approaches to map out the journey from a customer’s point of view, which would help us as the civil service understand what that looks like and therefore where we can make improvements. Peter [‘Schofield] has already referenced the work that we are doing on digital and automation, which is a real opportunity, but we cannot automate processes that are clunky or difficult. We have got to review those, simplify them and then make them available on a digital solution to encourage customers to “engage with us.

On communicating with pensioners, particularly those owed money she told MPs:

“I have a team within customer experience who are continually looking at the communications that we send to customers to make sure that they are simple. Obviously, we are reliant on listening and learning techniques, such as what we see through complaints, to identify where to look. When we see those things, we can simplify the processes, and potentially the communications to customers, to help them with that and keep them updated.”

On stopping people’s benefits she said she had a team of 36 people checking the vulnerability of people before they did this:

“They are there proactively to support the wider DWP in identifying and signposting support for our customers with the most complex needs. In the example you were just talking about, my team work closely with Bozena’s [Bozena Hillyer in charge of counter fraud and compliance] team and, when there is a difficult decision to make about stopping someone’s benefit because of potential fraud, my team are there to support the frontline to say, “Have you considered X, Y or Z to ensure that we are doing the right things for our customers and making the right decisions?”

Egregious frightening letter from the DWP to a pensioner

Can she make a difference? As this blog has shown some of the communications have been egregious. Like the one I featured last August to pensioner Rosie Brocklehurst when the department was conducting a pension review which said: ““If you fail to be available for this review and do not contact me, your entitlement to State Pension may be in doubt and your payments may be stopped.”

This was , of course, totally untrue – the department can’t stop anybody’s pension.

So at the moment the jury will be out on how successful Elizabeth Fairburn will be in changing the culture. But I will be watching to see if this determined woman from Leeds can make a difference or not. Her Linked In self description describes her as “A passionate, energetic and inspiring people leader, renowned for the ability to champion change and transformation especially in underperforming teams or functions with a need for significant cultural revolution. “

Watch this space to see if this is true for the DWP.

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DWP in 2021: Record fraud, record management bonuses and record pension underpayments

Department for Work and Pensions

The latest annual report for the Department for Work and Pensions was published last week and reveals yet another litany of failures in this ministry. After a drubbing last year from Parliament’s watchdog, the National Audit Office, its accounts were qualified again making it the 34th year in succession it has failed to balance the books accurately.

This finding may also be a Whitehall record – there can hardly be another ministry in Whitehall that has so spectacularly failed to produce accounts with a clean audit sheet.

The big benefit fraud failure is again the government’s flagship Universal Credit. In 2020 it the rate of overpayments increased from 4.4% in 2019-20 to 7.5% in 2020-21. Nearly all of the increase in fraud and error was on Universal Credit. DWP estimates it overpaid £5.5 billion of Universal Credit (14.5%) and underpaid £540 million (1.4%).

In 2021  it overpaid £8.5 billion of benefits – the highest level recorded. Fraudulent Universal Credit claims account for £5.2 billion of the £8.5 billion overpaid. DWP estimates that it overpaid 14.7% of all Universal Credit payments in 2021-22, compared to 9.4% in 2019-20 (the year preceding the pandemic). DWP paused fraud and error prevention measures due to COVID-19 disruption, some of which have not yet been reinstated.

As at 31 March 2022, DWP is owed £7.6 billion of benefit overpayments, Tax Credits, and advances by around five million claimants, an increase of over £1 billion from 2020-21. DWP expects this pattern to continue until it has fully embedded new prevention measures. It recovered £2.0 billion of this debt in 2021-22, with 90% of debt recovered through benefit deductions. DWP can only recover overpayments it identifies – most overpayments are not identified and will not be recovered.

Disabled people are also suffering mainly from underpayment of attendance allowance. The NAO report says: “The estimated rate of overpayment in Attendance Allowance is 2.2% (£120 million), and the underpayment rate is 4.3%(£230 million).

” These estimates suggest that Attendance Allowance has the lowest rate of overpayment (excluding State Pension), but the highest rate of underpayment of the benefits sampled this year. Almost all the underpayment of Attendance Allowance is classified as claimant error. In previous years the Department has used Disability Living Allowance (DLA) as a proxy rate for Attendance Allowance.”

Turning to pension payment once again women are being singled out to receive the worst treatment after being underpaid for years.

Widowed pensioners left to wait 18 months to 2 years

The report says DWP now estimates that it has underpaid £1.46 billion to 237,000 state pensioners. This is an increase of £429 million and an increase of 105,000 pensioners on its best estimate at the end of 2020-21. DWP has carried out additional reviews of its records to understand the pensioners that may be affected, but the full extent of the underpayments will not be known until every case has been reviewed. DWP aims to complete its review of State Pension underpayments by the end of 2023 for two of the three affected groups2 but this deadline will not be met for the largest group, widowed pensioners, which may take until late 2024 to complete. DWP will need to significantly increase the rate at which it reviews cases.

This means if you have been widowed civil servants will not even look at what you are owed for another 18 months  and you will be lucky to get the money by the end of 2024.

However while pensioners and the disabled wait for their legally entitled payments it has been a bonanza year for the top management of the DWP. This year a record 7 of the 11 ( it was 5 the previous year) top management walked away with extra bonuses for their work. This may be due to how the department had to handle extra Universal Credit payments during the pandemic but it is startling given the abysmal report by the NAO on its control of fraud and failure to pay people the right pensions.

You will have to remember some civil servants can retire at 60 depending on what civil service pensions scheme they belong to – 6 years before the public get their state pension – with both high pensions and a generous one off payment.

This is the roll call of the beneficiaries.

From top left: John-Paul Marks, Jonathan Mills, Neil Couling, Peter Schofield, Kate Farrington, Debbie Alder and Nick Joicey. Pic credits: gov.uk

Peter Schofield, permanent secretary and accounting officer, is already on £185-£190,000 a year. He gets a bonus of up to £20,000 plus £33,000 into his pension. He has accrued enough money to retire on £75-£80,000 a year plus a one off payment of up to £170.000 and his pension pot is worth £1.394 million.

Debbie Alder, director general, People, Capability and Place,£145-£150,000 a year. She gets a bonus of up £15,000 plus £57,000 into her pension. She has accrued enough money to retire on £35-£40,000 a year. She has a pension pot of £543,000.

Neil Couling, director of change and resilience (responsible for Universal Credit).£165-£170,000 a year. He gets a bonus of up to £15,000 and £16,000 into his pension. He has accrued enough money to retire on £75-£80,000 a year plus a one off payment of up to £190,000 and a pension pot worth £1.654 million.

John-Paul Marks, who left on 31 December last year, received £105-£110,000 for nine months ,a bonus worth up to £15,000 and £31,000 towards his pension. He left with enough money to retire on £40-£45,000 a year and a pension pot worth £532,000. He is now permanent secretary to the Scottish government.

Katie Farrington, director general, disability, health and pensions ,£120-£125,000. She gets a bonus of up to £10,000 and £87,000 paid into her pension pot. She has accrued enough money to retire on £30-£35,000 a year plus a lump sum of £50-£55,000 and pension pot worth £531,000.

Jonathan Mills, director general, Labour Market Policy and Implementation,£135-£140,000 . He gets a bonus of up to £5000 and £35,000 paid into his pension. He has accrued enough money to retire on £45-£50,000 a year plus a lump sum of £80-85,000. His pension pot is worth £690,000.

Nick Joicey, director general, Finance, £150-£155,000 . He gets a bonus of up to £5000 and £36,000 paid into his pension pot. He is also the husband of Rachel Reeves, the shadow Chancellor.

He has accrued enough money to retire on £55-£60,000 a year plus a lump sum of £90-£95,000 and a pension pot worth £967,000.

I don’t think I have to say anything more and leave the reader to make his or her judgement on the state of the DWP

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MPs challenge Opperman to rewrite guidance for people who lost thousands of pounds in additional pensions

MPs on the Commons Work and Pensions Committee has written to Guy Opperman, the pensions minister, asking him to rewrite the fact sheet on the Gov.uk website so people can properly claim compensation for losing additional pensions worth up to thousands of pounds after the new state pension was introduced in 2016.

Guy Opperman, pensions minister. Pic Credit: Twitter

The action from the committee comes after members of the public complained to MPs that it was virtually impossible to find the advice given in the fact sheet or claim. Not a single person has succeeded in a claim against the Department for Work and Pensions yet possibly 11 million people are entitled to it.

The people affected are a large but distinct group. They were  people who were contracted out of SERPS by their employer but were told they would receive an index linked guaranteed minimum pension. This arrangement was scrapped when the new state pension was introduced in 2016 for anyone in the private sector – but remains for public sector workers.

The money they have lost is anything from a few pounds a week to tens of thousands of pounds over the lifetime of their pension. This decision was never debated in Parliament or included in the Pensions White Paper. Just as with the 50swomen and divorcees, women are the most affected.

Robert Behrens, the Parliamentary Ombudsman, decided that there was maladministration by the DWP and two complainants got £1250 between them. He recommended that the government publish guidance on how to claim. But ministers ignored his advice and he never bothered to hold the ministry to account for its failure.

Peter Schofield, permanent secretary at the DWP

In March Peter Schofield, DWP permanent secretary on £190,000 a year, wrote to MPs on the committee, saying he had no intention of changing it. You can read the blog on this here.

Now Stephen Timms, the Labour chair of the committee, has written a strongly worded letter to Guy Opperman, asking for it to be rewritten. The full text is here.

Stephen Timms MP chair of the committee

The letter reveals anger among members of the public.

The letter said:” One person pointed out that the factsheet has been placed on Gov.UK in the section on ‘public service pensions’, when it is not in fact relevant to members of such schemes as they have full inflation protection.

“Another told us that they only became aware of it after looking through the correspondence between the Committee and DWP on the Committee’s website. They said “how anyone affected was expected to know it was there I will never know. There was no press release or other publicity to encourage the large numbers of people affected to look at the gov.uk site factsheet.
” Yet another person pointed out that some pension schemes were unaware of the factsheet.

One referred on its website to GMP indexation being partly delivered through ‘increases each year added to your State Pension’, without distinguishing between people who reach State Pension age before and after 6 April 2016.”

Only 19 people used the on-page search function

The analytic review of the factsheet sent to the Committee on 2 March 2022 said, the factsheet had had 6,922 ‘unique page views’, which seems low number given that the Department estimated that 50,000 people would be worse off in 2017-18 alone.13 Only 19 people had used the on-page search function, which is ‘very low’.

The MPs say: “The Committee would be grateful for an explanation of the circumstances in which an individual in the target group for the factsheet may be eligible for compensation and what steps should they take to get it. This should be included in a revised version of the factsheet.”

The letter concludes; ” The Committee is concerned that, now six years on from the NAO report, it is still the case that some people with GMPs negatively affected by the new State Pension reforms “have not been able to find the information they need.” In light of this, will the Department revisit its decision not to review the factsheet and commit to improving its content so that it better meets the needs of those affected and promoting it better? This Committee would be grateful for sight of a suitably revised version of this factsheet before it is published.
“I would be grateful for a response by 8 June.”

The DWP’s official position is “We encourage anyone who is concerned to read the online factsheet and contact us if they think they have been affected.

“The publication of the factsheet is the final step in the Department meeting the Ombudsman’s recommendations on this issue.”

But MPs are not satisfied and nor should anyone else. So Mr Opperman’s response will be closely watched. To repeat again if this is the way the ministry treats this group of people how are the 3.8 million 50s women who are hanging on for a compensation package from Robert Behrens are going to be vastly disappointed. Note it is SIX years since he recommended compensation for this group and not a single person has got a penny. At this rate the 50s women could be well into their 70s before they get any money or in their graves by then.

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Senior MPs challenge DWP on “shambles” after leaked internal documents and screenshots on Westminster Confidential reveal pension claims are being dumped

Dame Meg Hillier and Stephen Timms, chairs of the influential Public Accounts Committee and Work and Pensions Committee, have written to Peter Schofield, permanent secretary at the DWP, seeking an explanation why thousands of pensioners are being discouraged from claiming money they may be owed by the ministry.

The letter -published on the Work and Pensions Committee website – follows a high critical report by the Public Accounts Committee on the handling of pension back payments- and an articles on this website revealing internal advice given to ministry staff by senior management at the DWP.

It refers to my blog on February 10 which you can read here. This included an internal memo to people handling telephone callers seeking claims and a management training exercise aimed at speeding up the number of cases settled by staff by ignoring complicated claims, nearly all from women.

The most controversial was the ” drop and go” approach which urged staff ” if a case is complex or take a long time to resolve, move on to the next one in order to maximise the number of customers we can help today.”

Peter Schofield

The letter asks Peter Schofield to explain. It says:

“A report in Westminster Confidential on 10 February included screen shots, apparently of DWP internal documents, indicating that guidance to staff on handling calls about underpayments is to ‘close the call’ and only take details if the customer insists, unless the case is from or about someone who falls into one of the following four groups:
• A married woman whose husband claimed his State Pension before 17/03/2008
• An individual aged 80 or over who does not get any State Pension or only Graduated Retirement Benefit
• Someone who has died and may have been underpaid
• Someone who is divorced and wants to know how it impacts their State Pension.
It also refers to a message on the helpline which starts by telling callers that, if they are calling as a result of media coverage, “please be aware you do not need to contact us.” It goes on to tell people to stay on the line if they fall into one of the above groups.
Written in bold the MPs ask:

• What is the status of the documents quoted in the Westminster Confidential report? Do they represent current policy? If not, what changed and when?
• How will you evaluate the effectiveness of the revised information on Gov.UK in helping those who may be affected to understand their position and to take appropriate action?
Do you have plans to review your communication strategy and take further action if, for example, only a small number of those affected contact you to report a change of circumstances or make a claim?

The MPs say : “People in the four specified groups appear to be those who need to take action to receive an increase in their entitlement and, when they do claim, will generally only get twelve months’ backdating. Unlike those covered by the LEAP exercise,[This where the government has been mandated to pay back money such as the 135,000 pensioners who have been underpaid] there is no legal obligation on the Department to seek them out or pay them arrears.

The Department told the PAC that it could not publish guidance for those who may have been underpaid – such as an online assessment tool – because it believed it could not accurately cover all possible underpayment scenarios.

We remain extremely concerned – MPs

The letter goes on : “The Government’s response to the PAC report refers to revised information on Gov.UK which emphasises further that some individuals must make a claim and how they can do this. It is also working to provide a more direct route for those enquiring about underpaid State Pension in respect of a deceased customer. While this is welcome, we remain extremely concerned that the limited information on Gov.UK, together with the guidance and telephone message may discourage some from taking action that could increase their entitlement.”

The letter also discloses that a third of the way through the exercise to pay back the 135,000 pensioners owed money only 10 per cent of the cash has been paid out. This suggests that it may take much longer to pay the money to older pensioners who may not have long to live.

The MPs ask the permanent secretary to explain “The average and the longest amounts of time that pensioners who have contacted you about a potential underpayment can expect to wait for a full response.”

It is excellent that MPs are pursuing this story. The full letter is here. The DWP have until May 12 to respond. The ministry better have a good explanation.

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Judge backs DWP to deprive tens of thousands of elderly women of extra pensions

Judge Nick Wikeley giving his ” top tips for tribunal representatives on benefit appeals” at a study day.

Pic credit: Twitter

But his judgement admits national insurance is ” institutionally sexist”

Last month Judge Nick Wikeley, an administrative court judge, backed the Department for Work and Pensions to stop the pay out of millions of pounds to the most elderly pensioners in the country just as the ” cost of living crisis” started to hit home.

He took the decision on technical grounds despite his ruling conceding that the national insurance system was ” institutionally sexist” and that the women involved were likely to be the poorest pensioners in the country.

The case has considerable echoes with the one brought by BackTo60 for full restitution for the loss of their pensions after not being given enough notice of the raising of the pension age from 60 to 65.

Hugh Mercer QC Pic credit: Essex Court chambers
jane Russell Pic credit: Essex Court Chambers

It was brought by an 83 year old pensioner just known as Mrs GM with the pro bono backing of two barristers, Hugh Mercer QC and Jane Russell, both from Essex Court chambers. The DWP employed Julian Mitford QC and Ms Naomi Ling, who represented the DWP in the BackTo60 case.

Like all pensions cases it is complicated but also shocking. Her appeal contains a rule change for pension claimants brought in 2008 under Gordon Brown’s Labour administration.

Until 2008 women who claimed their own pension under the old pension system were also entitled to a second pension based on their husband’s NI contributions the moment he retired. But they had to claim it in their own right and the onus fell on the husband to tell them.

Labour changed this archaic system but did not backdate it

From March 2008 Labour changed this archaic system and women automatically received a second pension when their husband retired. But it was not backdated.

Mrs GM is one of those women in the first group. She got her pension in 1998 and her husband retired in 2000. She did not realise she should claim the second pension until 2017 – 17 years later. The DWP awarded her the second pension but only backdated it by one year. She has lost 16 years of her second pension. The pension is worth £82.45 a week.

Her case was she should be entitled to all her lost money =- either to 2008 when the law changed – or on human rights grounds and direct and indirect sex discrimination way back to 2000 when her husband retired.

The hearing turned into a battle between the DWP – which didn’t want to pay it- and human rights lawyers who thought she should be paid.

Sir Steve Webb

Sir Steve Webb, the former Liberal Democrat and coalition pensions minister, weighed in on her side while the DWP produced a star expert witness – Mr Lyndon Walters, a policy advisor to the DWP’s Decision Making and Appeals Team who was familiar with all the detail of the changes.

Sir Steve’s case centred around DWP policy and its failure to inform women properly about pension changes. The judge commented:

“The Webb W/S [Witness Statement] particularises the ways in which women, and especially married women have been, and to some extent still are, disadvantaged by the old system of retirement pensions, and seeks to quantify those affected. There are, with respect, undoubtedly a number of very well-made points in the witness statement, but they are primarily relevant to high level policy considerations. Understandably enough, and despite his distinguished ministerial career, there is much less about the nitty-gritty (or granular) operational issues underpinning the Department’s pragmatic approach.”

Indeed this moved to the heart of the judgement. The judge was more interested in the internal problems the DWP had in paying out pensions than the justice women were entitled to get the pension in the first place.

This showed up in the extraordinary support by the judge for the arguments put forward by Lyndon Walters.

The judge argued: “The Walters W/S makes out a compelling case for why the 2008 amendment took the exact form that it did. Mr Walters explains the general approach taken to encouraging claims for benefits , the practical considerations and rationale behind the introduction of regulation and the difficulties that would have lain in the way of extending the benefit of the 2008 amendment to those married women whose husbands had already become entitled to their Category A pension before that date In particular, he shows how it was that the advent of new IT systems enabled the Department to assess whether the wife of a Category A pension claimant was herself entitled to a Category B pension at the time of his Category A claim without the need for a separate claim being made. This is an informed and authoritative account that outweighs the Webb W/S, which lacks the same level of granular detail.”

Too difficult and expensive for the DWP to compensate the women

Very simply Walters had argued that it was too difficult and expensive for the DWP to inform the women of their rights. “Mr Walters explains, there was no functionality on the system to alert us to those women who were already entitled to have claimed for their category BL pensions but had not done
so” He concludes:

To identify these individuals, we could have run a search, or ‘scan’ in 2008. However, the task of performing such a search and reviewing the records of those identified, then contacting all of these
individuals and dealing with their entitlements would have been a significant additional burden on the Department, when the purpose of the PTP programme was to try to improve the efficiency and productivity of the system.”

The arguments over human rights were dismissed as peripheral – rather like in the 50swomen case the lawyers had argued: this was “unlawful discrimination on grounds of sex to inform a husband of a wife’s rights and then to reproach a wife of not availing herself of her rights”.

But then the judge admits: “Even so, although Mr Mercer did not employ such terminology, the label of institutional sexism may not be out of place in describing the national insurance scheme. This is undoubtedly, the context for the gradual amelioration of the position of women, and especially
married women, in relation to contributory benefits, including provision for their access to Category B pensions.”

And he further admits that it is like that the majority of women who have lost out in that age group could be among the poorest pensioners with the lowest pensions.

Frankly the judge’s decision in this case is remarkably complacent and far too favourable to the DWP. He seems to be more interested in the problems the DWP would have tracing the women than the loss the women have suffered under what was an archaic system. He is also far too complacent about the pace of redress for women who have suffered discrimination. That is another reason why we need to implement the UN Convention against all forms of discrimination against women (CEDAW) in full to stop this leisurely progress to righting centuries of discrimination. There will be hearing in July see the website for more information. This is particularly poignant in this case as the people involved are coming to the end of their lives.

A thank you to one of my readers Jeff Roberts, for drawing attention to this judgement. You can read it in full below.

Click to access UA_2021_001262_RP_CP_317_2021c.pdf

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Revealed: A new generation of women face pension inequality

Pic credit: Siemens pension scheme

Just before the Parliamentary recess the House of Commons library produced a new report on pension inequality showing how a new generation of women will lose out again to men unless action is taken now.

The report- The Pension Gender Gap – makes stark reading for millions of women now in work. The focus in this report is on the hurdles facing women to get an equal pension with men.

The main hurdle is the private pension or second pension women receive to top up their state pension. It quotes a Women’s Budget Group pre-Budget Briefing which says that: ‘Private pension schemes, promoted and subsidised by UK governments, are the main reason for the gender gap in pensions, placing women at a disadvantage due to their domestic roles and lower pay’.

The pay gap – still at 7.9 per cent – between men and women is basically discriminating against women getting the same pension as men. When the Conservative government set up the auto-enrollment scheme for a workplace pension in 2012- funded by employers and employee contributions – they excluded anyone not earning enough to pay national insurance.

While it increased the chances of women getting a private pension ( from 40 per cent in 2012 to 86 per cent in 2020) their savings fall away after they reach 35 because they are bringing up children and often take part time work.

As the report says: “The design of automatic enrolment widens the gap between lower and higher earners in retirement and disadvantages those in second jobs.”

Women who take part time work or multiple part time jobs are simply excluded from getting a second private pension partly paid by their employer.

Some low paid women may never get a work pension

And those who never earn enough at work – there are an estimated 500,000 of them nearly all women – never get a second pension at all.

As the Association of British Insurers told MPs on the Commons Work and Pension Committee: “Women disproportionately work in lower paid jobs; 75% of those earning under the £10,000 AE earning trigger are women. They also make up the majority of multiple job holders, as much as 64%. This is significant as their total income could be over the AE earnings trigger, but as it is divided across multiple jobs they will not be automatically enrolled into a pension.’

Fortunately it looks like the Department for Work and Pensions is planning to do something about this though we may have to wait a couple of years before this happens.

A DWP spokesperson said :

“Automatic enrolment has helped millions more women save into a pension, with participation among eligible women in the private sector rising from 40% in 2012 to 86% in 2020 – equal to that of men. Our plans to remove the Lower Earnings Limit for contributions and to reduce the eligible age of being automatically enrolled to 18 in the mid-2020s will enable even more women to save more and start saving earlier.”

But this isn’t the only barrier. The report highlights three other issues, affordable child care, pension rights for divorcees and monitoring pension equality.

On child care the report highlights demands by the trade union, Prospect and the People’s Pension, one of the larger pension trusts, both call for help with child care including tax relief for the care of the under two year olds and a local authority grant for 3 and 4 year olds.

Make pension savings a compulsory part of a divorce settlement

The Pension and Lifetime Savings Association call for the law to be changed so pension rights have to be considered in divorce proceedings.

“The government should consider changing the law to ensure that pensions rights are considered on a mandatory basis as part of divorce. Currently pensions may only be considered if there is a financial settlement considered by the courts. The process of pension sharing on divorce could also be better streamlined to remove friction and delay for all parties.”

And finally the Government Equalities Office should impose a mandatory requirement on the DWP to publish gender pension gap statistics and then draw up proposals to speed up ending the gap. The GEO did not want to comment on this.

There is one ray of hope arising from the new state pension introduced in 2016. It has narrowed the gap between men’s and women’s state pensions. Women got 82pc of men’s pension in 2016. By 2020 it had narrowed to 92pc. But the DWP could not tell me when it would be 100 per cent.

Unless action is taking speedily a whole new generation of women are going to lose out to men. No one wants to suffer the fate of 50swomen who have been so badly treated again. They are already worse off because of the abolition of the second pension in 2016.

Chris Thompson, a retired pension expect, pointed out both men and women lost out over auto-enrollment. “Between 2012 and prior to 6 April 2016 when the new state pension started people were also paying into the state second pension if they were not contracted out.

” From the 6 April 2016 people ceased accruing state second pension so are now much worse off than under the old state pension system. A low earner about £46 pw worse off and a high earner about £67 pw. Another thing to remember is that losses do not take into account loss of inherited and derived rights, loss of GMP indexation if contracted out or increase in NI due to loss of NI rebate.”

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