Help! HMRC has delayed updating my state pension record with top-ups

I am forwarding to you an email I sent to Jim Harra, HMRC’s Managing Director, on 30th May. Needless to say I have had no acknowledgment or response.

I’m sure there are many people in my situation. My last phone call to HMRC cost me over £6, and I’m still waiting for it. Do you know if any action has been taken against HMRC?

Mr Harra, I am writing to you out of sheer frustration with the service I received from HMRC and then DWP.

I will receive my AOW benefit in August of this year. Because I worked most of my working life before 2016, I am entitled to the lower rate.

However, I can buy non-contributory years to bring me close to the new state pension. I initially contacted the DWP to confirm the amount. That’s where the problem started.

Since I have been taking care of my grandchildren, I was advised to apply for the itemized adult child care allowance. I duly posted my application as requested by HMRC and it was received by the department in early January 2023.

On 12th January I spoke to HMRC who confirmed it had received it and would be processed by 4th May. This date came and went and I had not received anything so on 15th May I called HMRC again. It informed me that the delay in processing applications was now a further 23 weeks, and that it was only just beginning with applications received in September 2022.

While I am aware that due to the HMRC backlog, the NI contribution increase will be postponed to July 23rd, the new backlog takes me beyond that date.

I have made the decision to pay the additional NI on May 16th (a sum of over £4,000). To date I have not received confirmation of this amount and my details have not been updated.

I have now applied for my state pension. Needless to say, the amount is based on my contributions before I paid the extra years.

The DWP told me there is nothing they can do about it as it depends on the information they receive from HMRC and it can take HMRC up to 12 weeks to update their system.

I asked if my pension amount would be applied retroactively if it did not receive the information from HMRC in time – and they said no.

So I am fully waiting for HMRC to update my contribution record and to advise the DWP.

At the same time, if HMRC awards me the childcare credits, I would like a refund as through no fault of my own I feel I am being penalized by poor service at HMRC.

I’ve spent over 15 hours on the phone/writing and I’m no further forward.

I would like you, Mr Harra, to address this issue as described in the HMRC charter: Doing things right; making things easy; being responsive; treat you fairly and be aware of your personal situation because right now I feel totally let down.

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Steve Webb replies: I’m afraid you seem to have not one, but two ‘bottlenecks’ at HMRC and I can totally understand your frustration.

First, let’s look at the “Specified Adult Care Credits” – also known as “Grandparent Credits” – that you have applied for.

As you know, this is a system that provides assistance when a relative (such as a grandparent) takes care of a child while the child’s parent goes to work.

Because the parent works and pays the national insurances himself, that parent does not need the NI credit resulting from the child benefit for a child under the age of 12. So this can be transferred to you.

The way the process works is that before HMRC transfers the NI credit to you, it needs to be sure that the parent of the child does not need it.

This means that applications for this credit can normally only be submitted in the autumn after the end of the relevant financial year (when the NI administration has been completed). Claims for 2021/22 will therefore only be processed from autumn 2022.

As you can imagine, opening up the system in the fall will result in a large stream of applications all at once. It sounds like HMRC just can’t handle the volume, and this is something we’ve heard from other readers.

Indeed, I’m starting to wonder if they will have processed all of the Fall 2022 claims before the new batch is submitted in Fall 2023.

Assuming they process claims in date order, unfortunately your claim (which was filed in January 2023) is probably way down the line.

It should be processed eventually, and since it was created before you retired, I see no reason why DWP shouldn’t make any resulting pension increases retroactive, once the information is recorded in your NI record.

You should not suffer any financial loss due to HMRC’s delay in processing your application.

In the meantime, however, you have spent a large amount of money on voluntary NI contributions. I take it from your question that the years for which you paid voluntary contributions are also the same as the years for which you applied for credits.

Unfortunately, there are long delays between paying voluntary NI and seeing those contributions registered on NI records.

Again, there seems to be a backlog because so many people have rushed to get their voluntary contributions before the deadline (which was April 5, 2023 and has just been extended to April 5, 2025). There is no guarantee that these benefits will be in your records when DWP calculates your initial state pension.

But again, in my opinion there should be no question of DWP not repaying your pension in full with effect from your state pension age, provided you have paid the NI premiums on time.

If your “grandparent credit” application is found to be successful, you will need to reclaim the voluntary NI you paid for those years. Let me know if you have any issues with this.

It seems clear to me that ‘the system’ simply cannot cope when the public engages in large numbers.

Publicity around ‘grandparent loans’ has led to more claims and now backlogs, while publicity around voluntary NI has led to a whole different set of backlogs.

While the routine job of answering phone calls and emails and processing applications and payments is not glamorous, it is essential to the proper functioning of the government and deserves far more attention from ministers across the government than it currently receives.

What is the government saying?

HMRC was unable to investigate and respond to the specific case above without our reader’s details and their consent.

The government has just extended the deadline to buy additional state pension supplements to fill gaps in state pension administration dating back to 2006.

Following high demand, it has deployed additional staff to help answer phone calls and handle correspondence related to voluntary contributions, and apologizes to any customers experiencing delays.

Requests for Specified adult childcare credits must not be made before October of the year following the end of the tax year for which the individual wishes to file.

These credits can only be claimed if the person applying for child support does not need the NI credits they would normally receive.

If someone gets SAC points, any class 3 voluntary contributions paid for AOW supplement and no longer needed can be refunded to them.

The DWP is responsible for calculating the AOW. Once payments are processed or credits are applied, National Insurance data is updated in days instead of weeks.

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