The government has announced that it will begin a large-scale write-out to parents – mostly women – who may be affected by an error in their national insurance records.
In its annual report last year, the Department for Work and Pensions reported an error in the NI records of some people – mostly mothers - who should have had NI credits for time at home bringing up children.
At that stage, DWP said that they were unable to estimate the scale of the problem, though subsequent ‘fraud and error’ statistics implied that underpayments relating to NI errors of this sort could amount to around £100mn per year.
An update on the figures is expected to be included in the DWP’s imminent 2023 annual report.
However, today (July 6), the government said it will begin a search by writing to these individuals in the autumn.
LCP partner Steve Webb said the people in scope will mainly be women in their 60s and 70s who made a claim for child benefit before May 2000.
If they made a claim without putting a NI number on their claim it is possible that their credits may not have been transferred to their account from the child benefit computer.
These credits were previously known as ‘Home Responsibilities Protection’ or HRP.
Webb said: “It is good news that the government is finally taking action to deal with yet more errors in people’s state pension records.
“Missing out on protection for time at home with children could make a huge difference to a mother’s pension entitlement, and lump sum payments of arrears could run into many thousands of pounds for those who are affected.
“I hope that this correction process will be completed as quickly as possible, as far too many people have been underpaid for far too long.”
HMRC said it will be writing to people who have no HRP on their record and who have gaps in their NI record between 1978 (when HRP was created) and 2010 (when HRP turned into NI credits).
Where errors are found, NI records will be corrected and DWP will then recalculate state pensions and pay arrears where appropriate.
A government spokesperson said: “We have identified and are correcting an issue related to the historical recording of Home Responsibilities Protection on the national insurance records for people who first claimed child benefit before May 2000.
“Most people’s records will be unaffected, and we will shortly be launching a new online tool to help people check whether they need to claim. HMRC will also begin writing to those likely to be affected from the autumn.
“Our priority is ensuring everyone receives the financial support to which they are entitled, and state pension underpayment rates due to official error remain low at 0.5 per cent of expenditure. Where errors do occur, we are committed to fixing them as quickly as possible.”
sonia.rach@ft.com
