I get an underpaid state pension and HMRC does nothing: Steve Webb wins back £17,000

I am 75 years old and I contacted you in January of this year about my low state pension.

I said I spent part of my working life at home raising my family and you suggested I check with HM Revenue and Customs to see if I had received Home Responsibilities Protection.

I called and it sent me a claim form which I returned in early February. It is now July and I have not heard anything – what should I do?

SCROLL DOWN TO FIND OUT HOW TO ASK STEVE YOUR PENSION QUESTION

Steve Webb replies: It is completely unacceptable that you have clearly received an underpaid state pension for the past 15 years and now have to wait months to get this done.

If someone has an error in their National Insurance data that affects their state pension, there are two stages to rectifying it.

The first is to contact HMRC, who are responsible for keeping NI records. If the problem is an error in the NI records then there is no point in contacting DWP (even though they may be paying you your pension) as they will simply refer you back to HMRC.

Once your NI data has been updated, you can ask DWP to recalculate your state pension and pay any arrears.

In theory this should happen automatically, but we have come across people waiting months and months for their AOW to be updated after a correction to their NI data.

A crucial question is how long people can wait.

When I contacted HMRC on your behalf, it told me that it has a tool that tells people how long they are likely to have to wait for a reply to various types of correspondence. You can find this here: Find out when to expect a reply from HMRC.

Out of interest, I used the tool and entered February 1, 2023 as the date you requested Home Responsibilities Protection on your NI record.

The tool said you would have waited until early October 2023 for an answer — eight months after you signed up.

After I became involved, HMRC intervened in your case and you very quickly received a letter stating that you were entitled to 13 years of HRP.

HMRC commented to me as follows: ‘We have identified and corrected an issue regarding the historical registration of Home Responsibilities Protection in the National Insurance records for people who first applied for Child Benefit before May 2000.

Most people’s data will remain untouched and we’ve launched a new online tool to help people check whether they need to file a claim.

HMRC will also start writing to those likely to be affected from the autumn. Our priority is to ensure that everyone receives the financial support they are entitled to, and state pension underpayment rates due to official errors remain low at 0.5% of expenditure.

‘If errors do occur, we do everything we can to resolve them as quickly as possible.’

HMRC also drew my attention to a new tool they have created that allows some people to self-serve by checking whether they are entitled to HRP or not, without having to contact HMRC.

This resource can be found at: Why do you want to apply for Personal Responsibility Protection (HRP)?

HMRC also told me it apologizes to all customers experiencing delays related to National Insurance, including claims for HRP, and has allocated additional staff to answer correspondence in this area.

It said it is currently training more staff to process HRP claims during the upcoming correction exercise.

Given the major change in your NI record, it was clear to me that you owed a significant amount and also a large increase in your weekly pension.

I didn’t think it was right for you to stand at the back of a queue now, so I contacted DWP on your behalf and they quickly processed your revised pension.

I am pleased to say that you have now been informed that your pension will be increased by approximately £30 to £152 per week and that you are in arrears of over £17,000. I trust that you will receive this money soon.

I’m thankful to DWP for sorting it out, but I wanted to know how long it would otherwise take between updating your NI data and correcting your state pension.

I pointed out that HMRC has a tool that at least tells people how long to expect, while DWP doesn’t seem to have anything comparable.

DWP wouldn’t tell me how long it would have taken them to process your adjusted pension, just saying they aim to respond to correspondence as quickly as possible.

Unfortunately, for many people it seems that this can take many months between having their NI data corrected and their state pension being reassessed.

I’d like to see a lot more transparency from DWP about how long it takes to reassess people’s state pensions and some evidence that they’re working to reduce these lengthy delays.