MPs question govt comms on state pension underpayments

In a letter dated April 20, Stephen Timms, chair of the Work and Pensions Committee, and Meg Hillier, chair of the Public Accounts Committee, wrote to the DWP asking for further clarity on its progress with state pension underpayments.

The letter follows on from a report in January where the PAC called for the government’s state pension payment system to be overhauled and underpayments to be treated more seriously, while warning that other errors could still be unidentified.

Its report, ‘Underpayments of the state pension’, highlighted a number of areas where the government needs to make changes to ensure maladministration and underpayment issues do not continue.

Overall, the committee found that the DWP had been relying on a system that was not fit for purpose and had failed to mitigate against this, which it said was a failure in the government’s responsibilities.

It also branded the department’s complacency on the underpayment issue a failure, and warned there was still a risk that similar unidentified errors existed elsewhere in the state pension system.

The PAC concluded that people needed clearer information to act, or risk missing out on significant sums.

It recommended that the DWP “improves the clarity and availability of information on state pension underpayments, and what people who are concerned that they have been underpaid should do”. 

The government’s response to the PAC report saw it revise information on its website to emphasise further that some individuals must make a claim and explain how to make one. 

It is also working to provide a more direct route for those enquiring about underpaid state pensions with regards to deceased customers.

However, in the letter of April 20, the MPs said that while this is welcome, they remain “extremely concerned” that the limited information on the government website may discourage some from taking action that could increase their entitlement. 

They asked the DWP to answer the following questions: 

• What is the status of the documents quoted in the Westminster Confidential report? Do they represent current policy? If not, what changed and when? 

• How will you evaluate the effectiveness of the revised information on Gov.UK in helping those who may be affected to understand their position and to take appropriate action?

• Do you have plans to review your communication strategy and take further action if, for example, only a small number of those affected contact you to report a change of circumstances or make a claim?

The issue of state pension underpayments was first raised by LCP back in May, and relates to entitlements for certain married people, widows and the over-eighties dating back to 1992.

The issue arose because people failed to bring claims they were entitled to.

Under the old system, married people could claim a basic state pension at 60 per cent of the full rate based on their spouse’s contributions, assuming this would be a greater amount than the pension they would receive from their own contributions.

Since March 17 2008, this uplift should have been applied automatically. Prior to this date, a spouse had to make a “second claim" to have their state pension increased when their partner turned 65, and many women in particular did not make such claims.

The DWP has been approached for comment.

This article originally appeared on FTAdviser.com