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Women who have short-changed their AOW may be forced to wait another five years before they receive the money, warns a former Minister of Pensions.
The Ministry of Work and Pensions is far behind schedule in reimbursing the 237,000 women who have been underpaid according to official figures.
Hundreds of thousands of women are owed a total of £1.47 billion as a result of a blunder that left many unjustly living on reduced weekly state pensions.
Shortchanged: Hundreds of thousands of women owe £1.47bn following a blunder that left many unjustly living on reduced weekly state pensions
The widespread errors were discovered in 2020 by former pensions minister Sir Steve Webb and Money Mail’s sister website This Is Money. The government promised to track down all those affected.
But due to the slow pace of the corrective exercise, more than 100,000 women receive less state pension than they owe each month.
Only one in seven of those debts, representing 31,800 women, have been repaid since repayments began in January 2021.
£209m has been disbursed to date, with over £1bn outstanding. The errors affect pensioners who applied for state pension before April 2016 and who do not have a full citizenship file.
Sir Steve Webb, who is now a partner at consultancy LCP, says the government is ‘far behind’ on schedule, leaving pensioners with money when they need it most.
“More than 40,000 of those who were defrauded have already died without getting their money, and thousands will do so at this rate,” he says. “Early on, the DWP could come up with the excuse that they had to train new people.
“The program has been running for two years now, so it needs to be streamlined, but they’re still only getting a quarter of what they should be doing each month.”
Between February and October, an average of 2,000 payments were made each month.
However, this would need to rise to 8,000 to meet the government’s target of repaying all 237,000 of the money owed by the end of 2024.
Unpaid: The slow pace of the corrective exercise means that more than 100,000 women each month receive less state pension than they owe
Women will now have to wait another five years, even if payments rise to 3,000 a month, Sir Steve warns.
The Pensions department has already postponed its timetable earlier this year and extended the repayment schedule from the end of 2023 to the end of 2024.
It has promised to have 1,300 civil servants working on state pension matters by Easter 2024.
A spokesperson for the DWP said: ‘The measures we are taking now will correct historical underpayments by successive governments.
“We have established a dedicated team and committed significant resources to complete this, with additional resources to be allocated throughout 2023.”
In July, it emerged that department officials had made new errors in calculating state pensions and denied any errors until challenged.
The blunder concerns three specific categories of women who have been paid less than they owe over the years: married and divorced women, widows and the over-80s.
This is usually because married, divorced, or widowed women were entitled to higher rates because of their husbands’ employment records that were never applied.
Backlog: The Department of Work and Pensions is far behind schedule in paying back the 237,000 women it admitted were underpaid, official figures show.
Anyone over the age of 80 is entitled to the state pension regardless of their contribution history and should receive the state ‘over 80s’ pension if they were either ineligible for payments, or were receiving less than £85 a week on the basic state pension.
However, this did not happen automatically for 39,000 people who are now owed money.
Tens of thousands of parents and caregivers could also be affected, as child home care credits may be missing from their NI records.
The DWP previously promised to hunt down all those affected by the historical errors.
But it has warned that in cases where the retiree has died, they may not be able to identify the next of kin. Only three out of five of these cases are traceable.
Families owe an average of £8,900, with one in eight owing more than £40,000.
Anyone who thinks their deceased loved one might owe money can use the government’s special website to make checks: www.gov.uk/guidance/ request-information-about-underpaid-state-pension-for-someone -who -has -died.
Anyone who suspects that they have been affected and received less state pension than they should, can contact the Pension Service directly on 0800 731 0469.
j.beard@dailymail.co.uk
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