MPs demand full restitution for all pensioners hit by “shambles” of underpayments to over 134,000 people

A truly damning report by MPs on the Commons Public Accounts Committee today castigates the Department for Work and Pensions for running an “unfit for purpose” system to pay pensions to more than 12 million people.

The scandal of 134,000 pensioners being underpaid by around £1 billion dates back over 37 years and a number have already died before they could receive the money. The MPs say: “The errors happened because of the Department’s use of outdated systems and heavily manual processing, coupled with complacency in monitoring errors and a quality assurance framework that is not fit for purpose.”

The report says: “Managing Public Money requires Departments who make mistakes to put them right and restore people as far as possible to the situation they would have been in had the error not occurred. However, the Department is seeking only to pay people their legal entitlement in arrears, in some cases many years after the event, and has treated people inconsistently in paying interest on their arrears.”

The APPG report sent to Rob Behrens, the Parliamentary Ombudsman

Meanwhile another report from the All Party Parliamentary Group On State Pension Equality for Women submitted to Rob Behrens, the Parliamentary Ombudsman, on behalf of 3.8 million women who have faced delays of up to six years before receiving their pension falls short of asking for full restitution for the women.

Instead it is asking the Parliamentary Ombudsman to recommend that the women should receive a minimum of £10,000 each because of heartrending stories of poverty and hardship.

“Women have had their emotional, physical, and mental circumstances totally obliterated by a lack of reasonable notice. These impacts must be addressed, if we are to reach any kind of conclusion regarding this injustice”, it says.

The proposal is far better than the unspecified figure by the same committee prior to the 2019 election but falls substantially short for people who have lost £40,000 to £50,000 by the DWP refusing to entertain any payment at all.

The Public Accounts Committee report on the pensions underpayments is unflinching in its criticism of the DWP. It points out that 40,000 of those owed money are now dead adding:”94,000 pensioners are estimated to be alive, which represents approximately 0.9% of those currently claiming the pre-2016 basic State Pension.

These official errors affect pensioners who first claimed State Pension before April 2016 and who do not have a full National Insurance record or who should have inherited additional entitlement from their deceased partner.

90 per cent of the people hit by underpayments are women

Around 90% of the pensioners underpaid are women because of the types of State Pension claim affected. The Department does not expect to trace over 15,000 of the affected pensioners or their next of kin where the pensioner is deceased. On average, the Department estimates that the approximately 118,000 pensioners it can trace could receive payments averaging around £8,900 by the time the payments are made. So far, the Department has found underpayments of between £0.01 and £128,448.37.”

The report goes on:” The Department has not given people who are worried they have been underpaid enough information to find out what they should do, with the risk that many may still miss out on money they should receive.

” The Department’s communications strategy is to only contact those who it finds have been underpaid under the State Pension regulations. Other groups of pensioners can receive arrears if they make
a claim for additional entitlements to the Department, but the Department has provided very little information on which pensioners should do so.”

The report also points out that by repaying the money as a lump sum people means it could affect other benefits – such as entitlement to pension credit and social care payments. The DWP ignores doing anything about this.

Dame Meg Hillier, chair of the PAC, said: “In reality DWP can never make up what people have actually lost, over decades, and in many cases it’s not even trying.

Both the latest reports are damning for the Department and show up the disdain the ministry has for elderly people. The Public Accounts Committee report is the most damning as it suggests that the ministry is breaking Treasury guidelines on managing public money correctly by not taking comprehensive action to restore the rights of people – nearly all women – to get cash they are entitled to receive.

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