At the start of this year, the Department for Work and Pensions (DWP) said that it expects to complete the correction exercise into State Pension underpayments for two groups of women by the end of 2023. The Pensions Minister Laura Trott MP said the exercise for those on CAT BL and CAT D should be completed by the end of this year, but it could run through to late 2024.
This may be due to a further 100,000 State Pension cases which have been identified as having a possible underpayment. This means that DWP will be looking at 700,000 State Pension awards for errors, as opposed to the previously estimated 400,000, and could take an extra year to complete the exercise under the current run-rate.
The two groups of women include married women who should have received an upgraded State Pension and those aged over 80.
The latest figures from DWP show that £209.3million in State Pension underpayments have been repaid to 31,817 pensioners since the correction exercise began in January 2021 and the end of October 2022.
The latest report also shows that arrears payments made to affected married women average £6,929 and for those over 80, £3,172. While the check and correction exercise affects motley women, some men may have been underpaid too.
However, it’s important for anyone who receives an arrears payment that it may affect other entitlement.
In the latest Local Authority Welfare bulletin, which offers updates and guidance to advisors, it states that when a State Pension underpayment is identified, DWP will contact the individual to inform them of the changes to their State Pension amount and of any arrears payment they will receive.
It adds that any arrears due will be backdated to the date they became entitled to an increased State Pension amount.
It goes on to highlight two ares of entitlement that may be affected by a large back payment.
Effect on Housing Benefit
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.”
Pension Credit
The guidance states: “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.”
State Pension underpayment progress
Payments made between January 2021 and October 2022 are listed below.
Married (Cat BL)
- Cases reviewed: 62,965
- Underpayments identified: 13,157
- Average arrears: £6,929
- Total amount repaid: £91.1m
Widowed
- Cases reviewed: 25,268
- Underpayments identified: 7,876
- Average arrears: £10,772
- Total amount repaid: £84m
Over 80
- Cases reviewed: 23,720
- Underpayments identified: 10,784
- Average arrears: £3,172
- Total amount repaid: £34.2m
Who may be due back payments for State Pension?
There are six particular groups strongly encouraged to contact the pension service to see if they could be entitled to more State Pension.
- Married women whose husband turned 65 before March 17, 2008 and who have never claimed an uplift to the 60% rate
- Widows whose pension was not increased when their husband died
- Widows whose pension is now correct, but who think they may have been underpaid while their late husband was still alive, particularly if he reached the age of 65 after March 17, 2008
- Over-80s who are receiving a basic State Pension of less than £80.45
- Widowers and heirs of married women , where the woman has now died but was underpaid state pension during her lifetime
- Divorced women , particularly those who divorced after retirement, to check that they are benefiting from the contributions of their ex-husband
You can also find full guidance on transferring Basic State Pension payments on GOv.UK here.
How to check if you are affected or make a claim
A phone call to the pension service is the quickest way to find out if you are eligible for a State Pension refund.
The best number to call is 0800 731 0469 but full contact details can be found on the Gov.uk website here.
Earlier this year, a DWP spokesperson said: “The action we are taking now will correct historical underpayments made by successive governments. We are fully committed to addressing these errors, not identified under previous governments, as quickly as possible.
“We have set up a dedicated team and devoted significant resources towards completing this, with further resources being allocated throughout 2023 to ensure pensioners receive the support to which they’re entitled.”
To keep up to date with the latest State Pension news, join our Money Saving Scotland Facebook page here, follow us on Twitter @Record_Money, or subscribe to our newsletter which goes out Monday to Friday - sign up here.
READ NEXT
New calls for ‘justice’ for WASPI women over State Pension age compensation from MPs
Older people living in 25 countries may be due winter heating bill help of up to £600
Couples who want comfortable retirement lifestyle will need an annual income of more than £54,000
State Pension payments of over £2,000 each month for older people living in five European countries
Older people making new claim for Pension Credit could also qualify for £900 cost of living payment
