The Department for Work and Pensions (DWP) could owe hundreds of thousands across the UK as much as £6,929 each through a current correction exercise, with payments landing as soon as the end of the year.
Earlier in the year, the DWP said that State Pension underpayments for two groups of women should be rectified by the end of 2023, with Pensions Minister Laura Trott MP, adding that those on Cat BL and Cat D pensions may have to wait until late 2024.
Answering a question on the Government's UK Parliament site, the MP wrote: "As stated in DWP’s Annual Report and Accounts 2022, the Department expects to complete the exercise for CAT BL and CAT D by the end of 2023. For missed conversion cases, we aim to complete these as soon as we can but for this group the exercise could run through to late 2024.
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"The Government is fully committed to ensuring that any historical errors, unaddressed by previous Governments, are put right as quickly as possible. We have increased the number of people working on the exercise and at its peak, we plan to have around 1500 staff dedicated to the exercise.
"Our delivery is backloaded, with case reviews expected to significantly increase this year and going forward."
The Daily Record reports that this could potentially be due to a further 100,000 State Pension cases identified as having a possible underpayment. The DWP overall is looking at somewhere in the region of 700,000 State Pension awards as errors - as opposed to the previously estimated figure of 400,000.
The surge could also see the DWP take an extra year to complete the repayment period under the current run-rate. The two groups affected include married women who should have seen upgraded State Pensions, as well as those over 80.
Recent DWP figures show that £209.3million has been successfully repaid to 31,817 pensioners since the start of the correction exercise in January 2021, and the end of October '22. The latest report also shows that payments made to affected married women come to an average of £6,929, while affected people over 80 have seen an average of £3,172.
And while the exercise by the DWP is said to mainly affect women, a number of men have also been underpaid. It's worth noting however, that those receiving arrears payments could see other entitlements affected.
Via a Local Authority Welfare bulletin, it is said that when a pension underpayment is found, the DWP will go on to contact the individual to let them know of changes to their State Pension amount - as well as any arrears that they will receive.
It goes on to add that these arrears will be backdated to the date which a person became entitled to their increased State Pension sum, while highlighting two main areas of entitlement which could be affected by such as substantial back payment.
The guidance states: “There are no changes to Housing Benefit (HB) regulations to disregard the arrears payments of State Pension and these payments are capital. Entitlement to HB will be affected if the claimant already has capital between £10,000 and £16,000 where the arrears payment takes them above £16,000.”
It continues: "“Claimants who are receiving the guarantee credit element of Pension Credit will not be affected by the arrears payments if, once Pension Credit has been reassessed following the receipt of that payment, they remain entitled to Pension Credit.”
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