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A Freedom of Information (FOI) response obtained by Lane Clark & Peacock (LCP) partner and former pensions minister Steve Webb has revealed a series of state pension errors by the DWP prior to the current large-scale correction exercise.

LCP said the errors range from those affecting a handful of people to multi-million-pound blunders, several of which had not previously been made public.

Two major state pension blunders have previously been made known to the public and were subject to large scale rectification programmes, LCP said, while the FOI revealed a further six errors in state pension payments since 2007. 

The most important of those included an error affecting people who reached pension age under the old system and whose partner reached (or would have reached) pension age under the new system and has now died; an error was made in the way these payments were uprated.

Another error included was that under the new state pension women who paid the ‘married woman's stamp' may qualify for a concessionary rate of payment if they are married, divorced or widowed and would otherwise get a low pension in their own right.

In 2019, three years after the new system came into force, it appeared some married women were not being paid this transitional amount in line with their legal entitlement. However, cases are still emerging where women are not being paid the correct amount under these special rules.

The FOI also revealed some much smaller errors including entering incorrect figures for maximum pensions, some small underpayments of state second pension and errors where people had unusually large amounts of deferred state pension.

Webb (pictured) said: "Whilst anyone can make a mistake, what is worrying about this catalogue of errors is how long it can take for anyone to spot that anything is wrong.  In one case it was three years after the new state pension was implemented before anyone spotted a systematic problem with the payments to certain married women."

He added that it was also surprising that information about these errors and correction exercises has not previously been made public. 

"DWP need to improve on two fronts - better error checking to make sure people are not paid the wrong pension in the first place, and greater transparency so that the public is told when things have gone wrong."

According to LCP, previously-known errors from the DWP include "a large-scale correction of cases where parents were due ‘home responsibilities protection' for time at home with children but this was never mapped onto their state pension record. The correction exercise ran from 2009-2011, benefited around 36,000 people and resulted in £83m in arrears being paid."

The second known error, LCP said, was the current correction exercise running from 2021 to 2023, designed to identify 134,000 pensioners who had been underpaid state pensions and are owed around £1bn in back payments.

DWP responded to Webb's FOI request with a table including information on correction exercises dating back to 2007.

Those correction exercises included: State second pension underpayments, incorrect maximum additional state pension value, new state pension, reduced rate election, underpayments of deferral amounts and equal treatment exercise for transgender women.

Professional Adviser has contacted DWP for comment.

Source Professional Adviser 


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