Asked by
To ask His Majesty’s Government what steps they are taking to
tackle under-payment errors in state pensions.
The Parliamentary Under-Secretary of State, Department for Work
and Pensions () (Con)
My Lords, the Government are fully committed to ensuring that
state pension error is put right as quickly as possible. More
than 1,300 staff have been recruited or redeployed to the ongoing
state pension underpayment correction exercise, with case reviews
expected to significantly increase this year. This is an issue
that dates back many years, and we are working hard to correct
these historic errors and to ensure that they do not happen
again.
(Lab)
My Lords, I thank the noble Viscount for his reply and I know
that he takes the issue seriously. However, it is notable that
the figures published last week by the Office for National
Statistics showed that the main cause of underpayment was what it
termed “official error”, and in the last financial year, the
underpayments totalled £580 million—£50 million more than in the
previous year. It is getting worse. I note what the Minister says
about additional staff, but it is clear that more needs to be
done.
(Con)
The noble Lord is right. We know that 700,000 cases require
review; an estimated 230,000 customers will be affected. In terms
of what we have actually done, 173,538 cases have been reviewed;
46,760 underpayments have been identified, and just over £300
million was paid in arrears. As for the reasons that were
highlighted by the noble Lord, they are multifarious. One is that
DWP staff sometimes fail to manually set an action system prompt
on state pension accounts to review payments, such as reaching an
80th birthday.
(Con)
Is my noble friend aware of the beneficence of his department in
that those who have reached their fourscore years get a huge 25p
a week supplement, which, to the best of my knowledge, has never
been reviewed since 1971? Is this good value for money?
(Con)
I take note of what my noble friend has said. It is interesting
to note that we are talking about an overpayment rather than an
underpayment. Far from me to authorise taking away 25p from my
noble friend, despite the fact that I am a Scotsman.
of Childs Hill (LD)
My Lords, the department has said that the current large-scale
correction for those cheated of their full entitlement should be
completed by the end of 2024, but in its most recent annual
report it admitted a different error, relating to home
responsibilities protection, where thousands of mothers are
missing out on NI credits. Can the Minister assure the House that
the department will not wait until the end of the current
correction exercise before it starts on this new category of
cheated errors?
(Con)
The noble Lord makes a good point about home responsibilities
protection, which is one of the issues that we are looking at in
a timely fashion. We will be providing estimates and next steps
for corrective action in the summer. Obviously, we are looking to
move at pace to resolve these issues.
(Lab)
My Lords, the noble Viscount’s Written Statement last week
celebrated the fall in fraud and overpayment error in the social
security system as a whole, but it rather glossed over the
increase in underpayment to £3.3 billion. That is money which is
not going into the pockets of people who need it. Do the
Government not think that under- payments are as important as
overpayments, and what are they doing to minimise
underpayments?
(Con)
Of course they are important. Any underpayment is incredibly
important, as I am sure the noble Baroness would agree. The
department became aware of issues with state pension
underpayments in 2020 and, as mentioned earlier, the issues go
back several decades and through different Governments. We have
taken immediate action to investigate the extent of the problem
and are carrying out highly complex scans of computer systems.
Correction activity commenced on 11 January 2021; I say again
that this is an important matter and we are moving at pace.
(Con)
My Lords, as the exercise is focusing on women, and women’s state
pensions are still noticeably lower than those of men, are those
who are entitled to arrears also entitled to some kind of
compensation or consolation payment? How is my noble friend’s
department prioritising the work?
(Con)
I note what my noble friend says about the gender disparities,
which we are alert to. Indeed, the department has a discretionary
scheme which allows special payments to be made to customers to
address any hardship, but particularly injustice caused by DWP
maladministration. Consistent with other large-scale LEAP
exercises, special payments under the DWP discretionary scheme
will not, however, routinely be made, but I assure the House that
they are regarded or assessed on a case-by-case basis. Finally,
on prioritising, it is important to note that we are prioritising
those who are alive over those who are deceased.
(CB)
My Lords, I am one of those women who were underpaid. For years,
I got £6 a week—I was very exercised over how to spend it—whereas
many of my women friends who had never worked at all were getting
much more than that. With expert advice, I was able to access the
department and it was set right, but it seemed to me that the
problem was how to access the department. Once it had the issue
in hand it responded, but people need to know the email addresses
and there need to be pamphlets in post offices. There need to be
easy ways for older people to speak to someone in the department
and get an answer when they write—without, of course, having to
hold on to the phone for ages. Will the Minister ensure that that
happens?
(Con)
Indeed, and it is very important that we engage much more closely
with the customer base. Where underpayments are identified, the
DWP will contact the individual to inform them of any changes to
their state pension amount and of any arrears involved. There is
now, I am pleased to say, a more direct route for those inquiring
about underpaid state pension. Guidance on this, the House may
not be surprised to hear, is on GOV.UK and went live in July last
year.
(Lab)
My Lords, these cases are very urgent for some people; 25p may be
an issue for the over-80s, but in just January and February
14,500 over-80s were found to have been underpaid—out of a total
of 46,000 underpayments. The worst affected were those who had
been widowed, who were underpaid by, on average, £11,500. We all
know how quickly the DWP will go after you if you get overpaid,
so can the Minister assure us of two things? First, is priority
being given to those who most need the money and who, frankly,
may need it rather more urgently for reasons such as more
advanced age? Secondly, the NAO suggested in its very damning
report that the department assess all underpayments to see
whether there is a systemic cause which might affect other cases.
Is that now being done?
(Con)
Very much so; it is being done. I think I alluded to this
earlier. Any systemic problem has to be looked at as a matter of
urgency. On the other question the noble Baroness raised, I
mentioned the number of extra people we have put on to this
particular case. I reassure her and the House that the data shows
that we have reviewed an average of more than 15,000 cases per
month between November 2022 and February 2023, compared with an
average of only 5,000 per month over the first 22 months of the
exercise.
(Lab)
My lords, it is estimated that between 20,000 and 25,000
pensioners die each year because of low income and the hard
choices they have to make between heating and eating. Can the
Minister explain whether any assessment has been made of the
deaths and hardship caused by underpayment of state pension over
the last 13 years?
(Con)
No, I do not have any figures to support the argument that the
noble Lord is proffering. What I can say is that we very much
take note of wanting to support the most vulnerable. We have
increased benefits in line with the September 2022 consumer
prices index of 10.1%, including around 12 million pensions.
(Lab Co-op)
My Lords, is the Minister aware that, due to their incompetence,
the Scottish Government have underspent their budget in the last
financial year by £2 billion, which could have been spent helping
carers and others? Will the Minister confirm that this money will
now go back to the Treasury and not be spent helping poor people
in Scotland?
(Con)
Allow me to look into that and provide an answer to the noble
Lord. I think it is normally the case that the money goes back to
the Treasury but, without knowing here, I do not want to stick my
neck out on it.
(Lab)
My Lords, could the Minister indicate what corrective action will
be taken to address the needs of the WASPI women, who have been
underpaid for many years and are not entitled to their pensions
from the age of 60?
(Con)
I am aware, as we all are, of the WASPI issue. The noble Baroness
will be aware of the judicial review against the PHSO. We are
aware of it, but I am unable to comment because of the judicial
review.
