Thousands of individuals who welcomed babies in the 1980s and 1990s may be entitled to receive £8,000 from the Department for Work and Pensions (DWP), as reported by Wales Online. The issue stems from a National Insurance error that has left many individuals receiving less than they should be for their state pension. The HMRC has initiated the process of sending letters to those affected by this error, particularly stay-at-home mums who claimed Child Benefit between 1978 and 2000. The problem lies in the lack of Home Responsibilities Protection (HRP) being transferred to their National Insurance records, which could have reduced the qualifying years needed to claim the state pension.
Following an investigation, it was discovered that Child Benefit claim forms submitted before the year 2000 did not include National Insurance numbers, resulting in many missing out on the correct level of HRP entitlement. As a result, potentially thousands of individuals are not receiving the full amount they are entitled to for their state pension. HMRC has taken action by sending letters to 370,000 individuals, with the average amount owed back estimated to be £7,859 per person. Between January 8 and September 30, 2024, HMRC identified 5,344 cases of underpayments amounting to approximately £42 million in arrears.
It is estimated that 43,000 of those affected by this historical error have passed away, but their families can still claim on their behalf. Individuals over pension age are being prioritised and contacted first by HMRC. To determine if one has been underpaid, specific criteria need to be met, such as receiving child benefit in one’s name, having a child under 16 for the entire financial year in question, and not paying the married woman’s reduced stamp. Checking one’s state pension and National Insurance record to ensure HRP has been correctly accounted for is crucial for those who suspect they may have missed out.
For those who reached pension age after April 5, 2010, any year of HRP or credits should be reflected as a complete year on their National Insurance record. However, for those who reached pension age on or before April 5, 2010, HRP was recorded differently, necessitating a call to the National Insurance helpline to verify if HRP is present on the record. The government has launched an online checker tool on GOV.UK for individuals to assess their eligibility to make a claim. If HRP is found to be lacking on one’s National Insurance record, HMRC will liaise with the DWP to reassess state pension entitlement to ensure the correct amount is received in the future.
A spokesperson from the DWP highlighted the commitment to rectifying historical underpayments promptly, acknowledging errors that were not identified by previous administrations and dedicating resources to address the issue. This proactive approach aims to ensure that those affected receive the correct amount owed to them. The initiative serves as a testament to the government’s accountability in rectifying past errors and upholding fairness in pension entitlements.
By addressing this long-standing issue of underpayments, the DWP and HMRC are working towards providing financial justice to thousands of individuals who have been unknowingly receiving less than they are entitled to. The transparency in the process, coupled with the proactive measures taken to rectify the error, demonstrates a commitment to supporting pensioners and their families. Through continued communication and reassessment of state pension entitlements, the government is striving to ensure that individuals receive their rightful benefits and financial security in retirement.