Nationwide statistics printed in Could by the DWP urged that 23 per cent of pensioners have been underpaid, whereas 17 per cent have been overpaid.
Reporting by the BBC on June 17 revealed that the errors, which stay uncorrected, have been recognized about because the Nineteen Nineties.
Former pensions minister Sir Steve Webb, now accomplice at LCP, famous that whereas DWP pension mispayments sound tiny, they could have resulted in pensioners dropping out on different state advantages.
“It’s not a lot the pennies on the pension, it’s the knock-on impact on different issues,” he stated.
Webb gave the instance that a person might have solely been overpaid the state pension by 5p every week, however this will likely have put them over the restrict for receiving pension credit score, that means that the person wouldn’t have certified for advantages resembling chilly climate funds.
A call was made by DWP officers in 2002 that it might be too difficult to repair the issue, which principally affected a component of the state pension often known as the graduated retirement profit.
The graduated retirement profit is an addition to the essential state pension for many who labored between 1961 and 1975, and was a forerunner of the state earnings-related pension scheme.
A DWP spokesperson informed FTAdviser that the legacy IT situation liable for the issue is a long time previous and successive governments had not corrected it.
The spokesperson stated: “Our precedence is making certain each pensioner receives the monetary help to which they’re entitled and most graduated retirement profit awards are right.
“The place they aren’t, the overwhelming majority of over and underpayments are of 1p or 2p every week and we’re taking a look at options to this situation which has occurred beneath successive governments.”
Webb stated he was by no means made conscious of the issue and described the errors as “astonishing”.
“The story raises critical questions on transparency and accountability inside the DWP. It additionally prompts questions on what number of different errors are merely ‘swept beneath the carpet’ and by no means admitted,” he stated.
“The DWP now wants to return clear over the dimensions of this drawback, in addition to some other errors which have by no means been disclosed. Parliament will count on a written assertion from the minister on the earliest alternative with a full rationalization.”
The statistics printed in Could included reference to a full evaluation of state pensions for the fiscal 12 months 2022, the primary time one has been undertaken since fiscal 12 months 2006.
The DWP stated this course of, which included a possibility to straight contact prospects, revealed “some kinds of official error” being recognized inside the statistics for the primary time.
This text first appeared on FTAdviser.com