HMRC and the DWP confirmed that they would work to identify those affected by the error and pay them what they are owed and according to official data, the average payout awarded to those affected is around £7,859
HMRC has sent over 370,000 letters to Brits who are due payouts after being underpaid their state pension.
According to data published by the Department for Work and Pensions (DWP), the average payout awarded to those affected is around £7,859. The issue, first coming to light in 2022, saw large numbers of parents – mostly stay-at-home mums who claimed Child Benefit – missing Home Responsibilities Protection (HRP) on their National Insurance record.
HRP reduced the number of qualifying years you need to claim the state pension if you were not working and paying National Insurance. 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 miss periods of HRP between April 6, 1978 and April 5, 2000 which subsequently affected how much state pension they could get when they claimed it.
HMRC and the DWP confirmed that they would work to identify those affected by the error and pay them what they are owed. Last year, the government departments set up Legal Entitlements and Administrative Practice (LEAP), which allowed affected people to apply, correct their records, and make both arrears and ongoing revised state pension payments.
The new data, first reported by the Daily Record, shows that 493,813 people have used the online tool at GOV.UK to check if they are missing HRP from their state pension.
The DWP has previously said those closest to the state pension age – in their 60s and 70s – are being issued letters first. At the end of September last year, HMRC processed 37,289 applications from people over the state pension age and 5,428 from those aged below 66. So far, the DWP have paid out £42million in arrears payments. The DWP has said the families of those who had died will be able to claim the underpayments.
The DWP recently said it had “basically finished” its state pension correction exercise and is making “good progress” in addressing HRP errors. Permanent Secretary Peter Schofield was asked for an update during the latest Work and Pensions Committee hearing. He said: “I praise the professionalism of the team, because this is real detective work that they have gone through, but they have got there, and they have got money to people.
“I am really pleased, and I apologise through this committee to customers for these historic underpayments. It was vital that we restored confidence in the system, and one of the ways that we did that was by doing more work through our survey data on getting to grips with any other historic errors that there might have been.”
“On that specifically, HMRC have been leading the way, because this relates to the national insurance record and linking that to child benefit claims prior to 2000 – these are quite historic claims. HMRC have put details on their website – I think there have been almost 500,000 hits to their website. They have written over 300,000 letters to affected people.
“They are now seeing cases coming through the door – at quite a slow rate, I should say. Those are then addressed in terms of correcting the national insurance record. That then enables us to change the state pension entitlement and, if someone is already in receipt of state pension, to then pay any arrears. We have got through around 11,000 of those that have come through. Around 19,000 have been handed over to DWP, and we have got through around 11,000 of those, so we are making good progress on that.”
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.
