STATE pensioners in Scotland have been told they could receive a payout of thousands due to a Department of Work and Pensions error.
The DWP is correcting historic underpayments of state pensions worth around £8,000 in a major Cost of Living boost.
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And it means thousands of older Scots could be owned £7,859 after the issue stemming from Home Responsibilities Protection (HRP) errors was identified.
Those affected are individuals who took time off work to care for children or somebody with a disability between 1979 and 2010.
Child benefit claims submitted before 2000 often didn’t include a National Insurance (NI) number meaning the relevant HRP information wasn’t transferred between both systems.
HRP would have added credits that counted towards their state pension, much like NI credits work today.
As a result, thousands missed out on state pension benefits worth an average of over £5,000.
New figures reveal 370,000 women across the UK have been impacted by the pension error.
Between January 8 and September 30 this year, HMRC highlighted 5,344 cases of underpayments totalling approximately £42million in arrears.
Since then, the DWP has issued an average of £7,859 in back payments to those individuals who have been affected.
However, hundreds of thousands more who may be entitled to similar back payments will not receive them unless they take action.
It’s understood that 43,000 of those affected by the historic error are now deceased.
Emma Reynolds, minister for Pensions, said: “The government‘s priority is to ensure pensioners have security and dignity in retirement.
“I strongly encourage anyone who thinks they are missing out to check their eligibility and apply for Home Responsibilities Protection – taking just a few minutes out of your day now could mean a boost to your retirement.”
State Pension Errors
STEVE Webb, partner at LCP and former Pensions Minister, explains what state pension errors are and how they can occur…
The way state pensions are worked out is so complicated that many thousands of people have been paid the wrong amount for years without even realising it. Â
The amount of retirement pension you get usually depends on your National Insurance (NI) record.Â
One big source of errors has been cases where NI records have been incorrect, particularly for years spent at home with children.Â
This is a system known as ‘Home Responsibilities Protection’.
Alternatively, particularly for older pensioners, the amount you get can depend on the NI contributions made by your spouse.Â
Errors have arisen where the Government has failed to adjust the pensions of married women when their husbands retired or failed to increase pensions when someone was bereaved and lost a husband or wife.
Although the Government has spent years trying to fix these problems, there are still many thousands of people – many of them older women – on the wrong pension.
If you have always thought that your pension seems low, then it is worth contacting the Pensions Service to ask them to check, especially if you spent time at home raising children or if you were widowed and your pension didn’t change when your spouse died.
In an effort to locate those who are still alive, HMRC has issued more than a quarter of a million letters to people over pension age with no HRP on their record, encouraging them to submit a claim.
They may then be issued backdated payments, as well as a new monthly income if they’re found to have been affected.
Individuals who receive a letter indicating they may be affected can verify their status by visiting tax.service.gov.uk/guidance/Check-if-you-are-eligible-to-apply-for-Home-Responsibilities-Protection.
You can then apply for any missing HRP credits by visiting gov.uk/guidance/apply-for-home-responsibilities-protection.
An expert recently revealed that more pensioners could be owed cash but have been unable to claim because their letters only explain that they can apply online.
However, if you can’t do that, you can still complete a CF411 form and return it to HMRC by post to add the credits to your record.
How does the state pension work?
AT the moment the current state pension is paid to both men and women from age 66 – but it’s due to rise to 67 by 2028 and 68 by 2046.
The state pension is a recurring payment from the government most Brits start getting when they reach State Pension age.
But not everyone gets the same amount, and you are awarded depending on your National Insurance record.
For most pensioners, it forms only part of their retirement income, as they could have other pots from a workplace pension, earning and savings.Â
The new state pension is based on people’s National Insurance records.
Workers must have 35 qualifying years of National Insurance to get the maximum amount of the new state pension.
You earn National Insurance qualifying years through work, or by getting credits, for instance when you are looking after children and claiming child benefit.
If you have gaps, you can top up your record by paying in voluntary National Insurance contributions.Â
To get the old, full basic state pension, you will need 30 years of contributions or credits.Â
You will need at least 10 years on your NI record to get any state pension.Â
You might also be eligible for missing HRP credits if any of the following situations apply to you:
- You were caring for a child while your partner claimed child benefit instead of you.
- You were receiving income support because you were caring for someone who was sick or disabled.
- You were caring for a sick or disabled person who was claiming certain benefits.
If your partner claimed child benefit, you might be able to transfer the HRP credits, but they will need to agree.
Read more on the Scottish Sun
For example, if you were a stay-at-home parent and your working partner claimed the child benefit, they can transfer the credits to you.
Your payments will be recalculated if you have missing HRP credits and have already reached state pension age.
