HMRC began writing to older Brits last year after confirming a major administration error had occurred which caused thousands to have lower state pension payments than they should’ve
Thousands of Brits could be due £5,000 in state pension back payments before the end of next year.
HMRC began writing to older Brits last year after confirming a major administration error had occurred which caused thousands to have lower state pension payments than they should’ve. Those affected by the mistake were mainly stay-at-home mums who claimed Child Benefit between 1978 and 2000.
The issue saw National Insurance credits they should have received, which help build up your state pension entitlement, not transferred across properly. National Insurance Credits allow you to build up your qualifying National Insurance years when you’re out of work.
They were previously known as Home Responsibilities Protection (HRP) up until 2010 and these reduced the number of qualifying years you need to claim the state pension for parents and carers. Approximately 210,000 older people are believed to have been impacted and are due a share of underpayments totalling £1.3billion – equivalent to around £5,000 each.
Nigel Huddleston MP, Financial Secretary to the Treasury informed the Commons recently that HMRC was working with the Department for Work and Pensions (DWP) to identify those affected by the error over the next 18 months. The DWP has previously said those closest to the state pension age in their 60s and 70s are being issued letters first.
The Treasury’s financial secretary explained to MPs in the commons that the main cause of the issue was that National Insurance numbers were not always recorded when people claimed Child Benefit before 2000. This caused some people to have missing periods of HRP between April 6, 1978 and April 5, 2000.
He said: “HMRC and DWP are working together to correct cases as quickly as possible. HMRC started contacting potentially impacted customers from September 2023, prioritising those above the state pension age. They aim to identify and contact the majority of individuals who may have been affected over the next 18 months so that those eligible receive any arrears payments as quickly as possible.”
“To correct this issue, potentially impacted customers will be invited to check their eligibility and make an application to HMRC for Home Responsibilities Protection. To help individuals determine their eligibility, a self-identification tool is available on the GOV.UK website. Where an application is successful, those with a state pension impact will have their award corrected and any arrears paid.”
He also added that HMRC and DWP will conduct a wider campaign to ensure that all those who may be eligible for payments are aware of the correction exercise. Of the 210,000 people affected, it is estimated around 60,000 are now deceased and families will be able to claim any money owed.
Anyone who believes they were affected can check their eligibility online using the self-identification tool on GOV.UK here. It takes around five minutes to check and there are four sections to complete. Before completing the tool, the Government asks you to check your National Insurance records first to see if there are any gaps. You will also need to know if you paid National Insurance at the reduced rate for married women, and if HRP is already held on your National Insurance record.
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.”