I claimed child benefit and think I missed out on state pension

I receive my state pension of £180.97 per week. I checked my National Insurance records and I have 37 years of full premiums and seven years of no full premiums between 1977 and 1984.

I had my children in 1976 and 1979 and went back to work in 1984 when my youngest was five years old.

Should I receive a higher pension because I took care of my children during the seven-year difference?

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Steve Webb replies: As you may be aware, the government recently admitted that more than 200,000 people – mostly mothers – have been paid an underpaid state pension amounting to £1 billion due to errors in recording time at home with children in the National Insurance data.

The problem seems to have arisen because people applied for child support before May 2000 and did not put an NI number on the application form because you were not required to provide that until then.

In this column I explain how you can check if you are one of those people, and what to do if you are.

To summarize the matter briefly, in the 1970s the then government decided that it would be good to take into account the time it takes to raise children when working out state pensions.

The new scheme was only introduced in 1978/79, so any year prior to 1978/79 in which someone was not working due to family obligations does not count.

When the system was first introduced it was known as ‘Home Responsibilities Protection’ or HRP.

Each year from 1978/79 that you received child benefit for a child under the age of 16 counts as one year of HRP, under three main conditions:

– The child had to be under 16 years of age throughout the financial year; the year in which your youngest child turned 16 therefore does not count;

– The child benefit had to be in your name (in some cases, the HRP can be transferred to you afterwards, provided you have reached retirement age after April 5, 2008); AND

– You were not eligible if you paid (or were able to pay) the national insurance schemes for the relevant year at the reduced ‘married women rate’;

So in your case it sounds like you are entitled to HRP for 1978/79 through 1983/84.

The way HRP was factored into your pension calculation was a bit odd. Instead of counting in full as one year towards retirement, HRP years were instead *subtracted* from your target 39 years for full retirement.

To give a simple example, say you had 19 years of full contributions and 5 years of HRP.

You might imagine adding the 19 to the 5 to get 24 years toward a goal of 39 years — a contribution record of 62 percent.

But instead they said you have 19 full years on your way to a (reduced) target of 34 years, a contribution record of 56 percent.

As you can see, this means that an HRP year is not as good as a full year of contributions.

A consequence of applying HRP this way is that for those who reached retirement age before April 6, 2010, your HRP will *not* appear on your NI record as a full qualifying year.

In this situation, the only way to find out if you have HRP on your file is to call the National Insurance helpline on 0800 200 3500.

On April 6, 2010, the system changed in a way that makes years of HRP much more valuable. For those who reached retirement age after that date, any HRP years on your file were converted into full qualifying years for your AOW benefit.

This means that for people who reached retirement age after April 5, 2010, HRP years *must show* as full qualifying years on your online NI record.

If they are missing, there is a good chance that an error has occurred. The other change in 2010 is that NI credits for time at home with children now only apply if the child is under 12 years old instead of under 16 years old as before.

In your particular case, you told me that you were born in 1949 and therefore reached retirement age in 2009. Based on my explanation above, we wouldn’t expect HRP to be on your record because you reached retirement age before 2010 – although you could call that to make sure it’s there.

If HRP is missing, your pension will only go up if your ‘basic’ AOW is less than the current figure of £156.20.

If your total amount already includes a full basic pension, *even if* there is an error in your HRP, your pension will not change because you already receive the maximum amount.

Where there are errors in people’s NI records due to missing HRP, HMRC is planning an extensive program to write people who *may* be at risk of missing out, but the truth is they are not really sure.

This is because the data on who received child benefit in the 1980s and 1990s have all been destroyed.

While they clearly don’t want people asking speculative questions, if someone checked as explained above and is clearly missing HRP, it seems to me they shouldn’t wait and claim their HRP.

This can continue completing the Home Protection Responsibilities form.

Based on the feedback we’ve received so far it’s clear that HMRC is taking a long time to process HRP claims, and even longer for DWP to update people’s pension entitlements, but it’s worth looking into it now system steps if you are sure you miss.