Cheated Again! MPs blast Department for Work and Pensions for not acting fast enough to reimburse £1.46 billion to pensioners

The DWP is attacked today by MPs on the powerful Commons Public Accounts Committee for not having a credible plan to reimburse hundred of thousands of pensioners who have been shortchanged billions of pounds in pension payments.

The scheme is the only programme where the DWP admits it has made gigantic mistakes by underpaying pensioners and is committed to return the money owed to them. It is obvious at the moment that ministers and civil servants have no intention of reimbursing people who have been denied a guaranteed minimum pension when they were contracted out by their employer.

Nor do they appear to be remotely interested in compensating the 1950s women who lost six years of their pensions despite it being clear that the Parliamentary Ombudsman, Robert Behrens, has found maladministration in not telling the women properly about it, let alone even considering whether women were unfairly discriminated by the decision. The fact that not a single minister has talked to anybody about 50swomen since 2016 speaks volumes.

What is clear from a report by the MPs ( which also tackles benefit fraud) is that they are distinctly unimpressed by the DWP’s handling of this despite assurances from Peter Schofield, the permanent secretary, at the department during a committee hearing earlier this year.

Peter Schofield Pic credit: gov.uk

The Department’s efforts to correct the systemic underpayment of State Pension are too slow to meaningfully put things right. The Department now estimates that 237,000 pensioners have been underpaid a total of £1.46 billion in their State Pension.
“Despite these underpayments going back as far as 1985, the Department’s overall exercise to correct this issue is delayed from the end of 2023 to the end of 2024. The Department cannot be certain that its plan to deliver the exercise on schedule is achievable, as it is dependent on assumptions around recruitment, retraining, and automation.

“We are not convinced that the Department has done enough to ensure its communications to potentially affected pensioners are sufficiently clear. We are concerned that this may leave many pensioners lacking reassurance that they will receive meaningful and timely redress.

We remain unconvinced about the DWP – MPs.

“The Department does not yet know the full extent of the underpayment relating to Home Responsibilities Protection, and it is dependent on HMRC to evaluate the impact of these underpayments on pensioners. The Department cannot be certain that it has identified all the underpayments implied by the results of its annual measurement exercise. Overall, we remain unconvinced that the Department’s control systems are adequate to detect further underpayments before they build up into major issues in future.”
Sounds familiar. Anyone trying to ring the department already knows what lousy communicators the ministry is- that is, if you can get through to them..

And it looks like there is worse to come. The report said:

“The NAO [National Audit Office] reported that the Department cannot rule out that there may be further groups of pensioners, as yet unidentified, that have been affected by a historic underpayment.
It concluded that this was in large part because the Department had not set out plans to revise its control processes for State Pension cases to ensure that underpayments are detected and recorded at the point of payment.”

Yet again through delays and failure to get a grip pensioners are being cheated of their rightful dues and many may die before they receive them. Is there no part of the DWP that can function correctly?

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Therese Coffey’s mean “pay out and grab back” scheme for the poorest elderly cheated of their rightful pensions

Therese Coffey

A new scandal was revealed in the House of Lords this afternoon which could affect tens of thousands of the poorest pensioners already cheated for decades of the right money for their pension.

The underpayments running to tens of millions – exposed by Sir Steve Webb, the former Liberal Democrat pensions minister – is slowly being sorted out by officials at the DWP though as this blog exposed earlier with the most complicated cases being delayed under a secret ” drop and go ” scheme to get the numbers up.

Baroness Stedman- Scott

The minister Baroness Deborah Stedman-Scott revealed that so far £60.7 million had been paid out to 9491 people cheated of their full pension – suggesting that some of the payments must be pretty large.

Extraordinarily she could not give a gender breakdown – which led to a rebuke from Labour peer Lord Jeff Rooker who accused her of hiding the fact that vast majority must be all women.

But then came the killer blow. In answer to a question to another former pension minister, Baroness Ros Altmann, Baroness Stedman-Scott confirmed that the poorest pensioners who got the money -mostly in their 80s and 90s – would cease to get their fees paid by local councils if they got more than £23,250 in England

Hidden bonanza for care home owners

Instead they would have to pay privately until their pension savings money fell below £23,250. Given that many care homes charge differential rates for people residing there – local authority rates are often lower than private rates – this could even be a new bonanza for care home owners – as they could get more money for providing the same services.

Baroness Ros Altmann raised the issue

This “pay out and grab back” scheme was universally condemned by peers of all parties. Not one supported Baroness Stedman-Scott who was looking increasingly uneasy at having to admit this.

She hinted that in rare cases the DWP could make a special payment to a pensioner or that local authorities could perhaps waive individual fees.

“Special payments under the DWP discretionary scheme are not routinely made to those who have been underpaid state pension. However, under exceptional circumstances, such as where severe distress has been caused by the way an individual case has been handled, a case may be referred for consideration of a special payment.”

This got no purchase with the peers. The most critical comment came from Lord Forsythe of Drumlean, another former Tory minister, who accused the government of ” hiding behind the skirts of local government” rather than take national responsibility for the change.

Lord Rooker raised the issue of 50s women and the government’s ” holiday” from funding the national insurance fund

Lord Rooker linked this action to the failure to pay out the 50s women when the pension age was raised to 66.

“The noble Baroness talks about “people” and “persons”, but we are talking about women. When was the last time tens of thousands of men were short-changed with their pension? I do not recall that happening. When the Government took their long-term holiday from paying into the National Insurance Fund, they deprived hundreds of thousands of women of the pension that they were entitled to. Why cannot that be redressed?”

Government ignores answering who is to blame at the DWP

Conservative peer Baroness Patience Wheatcroft, a former journalist, wanted to know who in the DWP was responsible for this failure to pay so many people the right pension.

“My Lords, when more than £60 million that should have been paid has not been paid, surely somebody should be held responsible in the end for that error. In the private sector, the sum of £60 million would be taken very seriously. Can the Minister tell us, therefore, who was ultimately responsible for this failure to pay such a large sum of money?”

The minister couldn’t – she just blamed it on a computer failure.

She did promise under pressure to approach both the Treasury and Therese Coffey to see if the government could introduce regulations for councils to ignore the pension back payment. But admitted she might get short shrift from the Treasury.

All this points to another blow for the 50s born women when and if they get compensation in the future. By that time many may well need social care -only to find out that they will have to give back their payments to cover their care home costs.

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Exclusive: Don’t call us, we’ll call you – the shambles inside the DWP as it struggles to cope with the pension underpayment crisis

Internal documents and screenshots reveal staff instructed to halt calls from worried pensioners and avoid complex cases to boost numbers

The Department for Work and Pensions is telling the public that it has set up well trained specialist teams to pay out up to £1 billion owed to at least 135,000 pensioners after huge underpayments were uncovered.

The real picture is one of overworked staff desperately trying to calculate with outdated computers how much money people will get while creating a knock on effect for new people applying for their first pension.

Now documents and screen shots seen by this blog reveal that staff have been instructed to ” close calls” from pensioners if they don’t fit the profile and even drop investigating complex claims for simpler ones to artificially boost the number being helped.

A new telephone message has been put on the pension helpline telling people NOT to call them and wait to be contacted instead. ” please be patient as this may take us some time.” Sometime in the worst case scenario could be December 2023. And for people who may not have long to live that is bad news. Note also it blames media coverage for the volume of calls.

Document showing the telephone message
Document showing when staff are instructed to end the call. But if someone insists they want to give them the information they have to take it down. It also shows that none of the staff can tell people hen they will get an answer and they are told not to call back. At least the ministry admits it has a large volume of calls.

Yesterday the Department launched from Newcastle-upon-Tyne its SP [state pension] Challenge – a slick management exercise to try and instill team work among thousands of staff who are trying to cope.

Screenshot showing management in difficulty with old computers in tracing pension cases

However some of the screenshots reveal how management haven’t necessary got all the information because of outdated computers.

Probably the worst example of the problems they face is the ” drop and go ” policy – where staff to boost numbers are told to abandon the case and find another simpler one. This was used during the challenge yesterday.

How they were prioritising “easy” cases to build up numbers

The official response which I got before I saw these documents is:

“Resolving the historical State Pension underpayments that have been made by successive governments is a priority for the Department and we are committed to doing so as quickly as possible.

“We have set up a dedicated team and devoted significant resources to processing outstanding cases, and have introduced new quality control processes and improved training to help ensure this does not happen again. Those affected will be contacted by us to ensure they receive all that they are owed.”

The DWP will have to respond soon to the House of Commons Public Accounts Committee which has already called out the whole process as a shambles. It will make interesting reading to see how top officials and ministers spin their replies. Whatever they say the situation can’t be good if the ministry continues to emphasise it doesn’t want people to ring them.

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