Recommendations & Conclusions
22 items
2
Conclusion
Thirty-Third Report - Underpayments of …
The Department’s complacency about the level of underpayments inherent in its approach to administering State Pension has led it to fail pensioners. The Department’s highly manual systems and complex State Pension rules has led to calculation errors and the underpayment of thousands of pensioners. The Department, however, argued that low …
Government response. 2025. This should be broken down by how much coverage is being achieved by: • individual commercial suppliers, such as Openreach, Virgin Media O2 and smaller suppliers know as alternative networks or “alt-nets” etc., and the extent to which it …
HM Treasury
3
Conclusion
Thirty-Third Report - Underpayments of …
The Department has not given people who are worried they have been underpaid enough information to find out what they should do, with the risk that many may still miss out on money they should receive. The Department’s communications strategy is to only contact those who it finds have been …
Government response. 3.1 The government agrees with the Committee’s recommendation. Recommendation implemented 3.2 The department welcomes the endorsement of action already taken with their proposed recommendation, although rejects the Committee’s conclusion. As the department set out in the Committee hearing on 28 …
HM Treasury
4
Conclusion
Thirty-Third Report - Underpayments of …
Correcting the State Pension underpayments comes at a great cost to the taxpayer and requires experienced specialist staff that are in short supply. The correction exercise requires specialist staff and training and is expected to cost the Department £23.4 million, with over 500 staff recruited, by the time the exercise …
Government response. 4.1 The government agrees with the Committee’s recommendation. Recommendation implemented 4.2 The department continually reviews and manages demand across the business, balancing the need to deliver existing services with any in-year pressures or new work. This is the case across …
HM Treasury
5
Conclusion
Thirty-Third Report - Underpayments of …
The Department has not been sufficiently transparent to Parliament about the State Pension underpayments. Until recently, the Department has been reluctant to provide details of the volume or value of State Pension underpayments or the backlog in processing new State Pension applications to the general public or Parliament. We note …
Government response. 5.1 The government agrees with the Committee’s recommendation. Recommendation implemented 5.2 The department agrees with the recommendation, but disagrees with the overall conclusion, given it has already committed to providing updates on the progress of the Legal Entitlement and Administrative …
HM Treasury
6
Recommendation
Thirty-Third Report - Underpayments of …
In paying pensioners, a lump sum of their arrears, the Department may not be fully restoring them to the position that they would be in had the Department paid them correctly in the first place. The payment of a lump sum of arrears may affect the pensioner’s current or future …
Government response. 2030. To build a credible and evidence-based profile for delivery beyond 2025 in the UK’s dynamic market, the department will need to reach three key milestones: • completion of all remaining market surveys to identify and understand the relevant suppliers’ …
HM Treasury
7
Conclusion
Thirty-Third Report - Underpayments of …
Given the nature of the underpayments identified there must be a risk that similar, unidentified errors exist elsewhere in the State Pension caseload. For example, the NAO report states that “the Department did not find any significant evidence that it had failed to properly process cases where a pensioner had …
Government response. 2021. Greensill Capital marketed its salary advance scheme, Earnd, to NHS trusts from 2019 and charged no fee to employers and employees for using the service Based on a report by the National Audit Office, the Committee took evidence on …
HM Treasury
1
Conclusion
Thirty-Third Report - Underpayments of …
On the basis of a report by the Comptroller and Auditor General, we took evidence from the Department for Work & Pensions on the issue of underpayments in State Pension1
Government response. Based on a report by the National Audit Office, the Committee took evidence on Thursday 28 October 2021 from the Department for Work & Pensions. The Committee published its report on 21 January 2022. This is the government’s response to …
HM Treasury
8
Conclusion
Thirty-Third Report - Underpayments of …
In addition, the customer information contained in the legacy system is difficult to obtain, taking several weeks to scan, and demographic data—such as income distribution or ethnic background—are not available.15 The Department told us that, while it was not 7 Q 30 8 C&AG’s Report, para 2.3 9 Qq 39, …
Government response. 1.2 As outlined at the Committee hearing on 28 October 2021 (questions 39; 46; 64), the Department for Work and Pensions (the department) has made significant progress to transform customer experiences and replace legacy IT systems for state pension payment …
HM Treasury
9
Conclusion
Thirty-Third Report - Underpayments of …
We challenged the Department on the adequacy of its quality assurance mechanisms.18 Despite the complexity of State Pension entitlements and the increased risk posed by manual processes of calculating an award, the Department’s own internal analysis found that existing quality checks failed to identify the systematic underpayment of thousands of …
Government response. 2.3 The department has strengthened its assurance methodologies, to ensure that associated sampling is more robust and picks up the widest range of errors possible for correction, using insight to inform organisational learning and continuous improvement plans. 2.4 All other …
HM Treasury
10
Conclusion
Thirty-Third Report - Underpayments of …
The Department told us it changed its quality assurance framework over the LEAP exercise and business-as-usual State Pension processing.21 Following our evidence session the Department explained that, as part of its quality strategy review it reviewed its training products, amended the instructions used by front-line staff to ensure they are …
Government response. 2.2 The department rejects the Committee’s assertion. The department has been taking action to prevent future errors since Summer 2021. As outlined at the Committee hearing on 28 October 2021 (questions 40; 79), since July 2021, the department has been …
HM Treasury
11
Conclusion
Thirty-Third Report - Underpayments of …
When we asked the Department what positive assurance it obtained that the system was working and that it was paying people on time and the right amount, it set out the three quality assurance tiers and that said that its focus was on areas with higher error rates. The Department …
Government response. 2.3 The department has strengthened its assurance methodologies, to ensure that associated sampling is more robust and picks up the widest range of errors possible for correction, using insight to inform organisational learning and continuous improvement plans. 2.4 All other …
HM Treasury
12
Conclusion
Thirty-Third Report - Underpayments of …
A Legal Entitlements and Administrative Practices (LEAP) exercise is a systematic review of cases at risk of being underpaid to help the Department ensure it has met its legal responsibilities. The Department for Work & Pensions (the Department) uses LEAP exercises to make key decisions in situations where a mistake …
HM Treasury
13
Conclusion
Thirty-Third Report - Underpayments of …
The Department began a LEAP exercise for State Pension underpayments in January 2021, which was originally expected to take more than six years to complete. Following a ministerial decision in March 2021 to recruit additional staff, the Department revised the completion date to the end of 2023.27 Cost to taxpayer
HM Treasury
14
Conclusion
Thirty-Third Report - Underpayments of …
The Department currently has just over 200 people conducting the LEAP exercise. The State Pension correction exercise requires specialist staff and training and is expected to cost the Department £23.4 million, with over 500 staff employed, by the time the exercise completes. The Department redeployed its more experienced caseworkers from …
Government response. 4.2 The department continually reviews and manages demand across the business, balancing the need to deliver existing services with any in-year pressures or new work. This is the case across all the department’s service delivery areas. For example, the department …
HM Treasury
15
Conclusion
Thirty-Third Report - Underpayments of …
We asked the Department about the findings of the NAO financial audit of the Department’s 2020–21 accounts, which identified nearly 200 of 1,500 cases where the LEAP reviewers had incorrectly assessed arrears on married women’s entitlement.31 The NAO concluded that, given the complexity of the rules governing State Pension entitlement, …
HM Treasury
16
Conclusion
Thirty-Third Report - Underpayments of …
The Department decided to contact pensioners reviewed as part of the State Pension LEAP exercise only if a correction was made to their basic State Pension.36 Other groups of pensioners can receive arrears if they make a claim to the Department, however, the Department has provided very little information to …
Government response. 3: PAC conclusion: The Department has not given people who are worried they have been underpaid enough information to find out what they should do, with the risk that many may still miss out on money they should receive. 3: …
HM Treasury
17
Conclusion
Thirty-Third Report - Underpayments of …
When we asked if the Department is able to provide greater clarity to those who think they may have been affected, the Department said that it cannot publish guidance for those who may have been underpaid, such as an online questionnaire, because it believes it cannot accurately cover all possible …
Government response. 3.2 The department welcomes the endorsement of action already taken with their proposed recommendation, although rejects the Committee’s conclusion. As the department set out in the Committee hearing on 28 October 2021 (see questions 149 to 154); there is information …
HM Treasury
18
Conclusion
Thirty-Third Report - Underpayments of …
Until recently, the Department did not keep records on pensioners for more than four years after the date they died due to its data retention policy.40 However, it said it has now 32 C&AG’s Report, paras 18, 4.11 33 Qq 79, 80 34 Qq 1, 83; Letter from Permanent Secretary …
Government response. 3: PAC conclusion: The Department has not given people who are worried they have been underpaid enough information to find out what they should do, with the risk that many may still miss out on money they should receive. 3: …
HM Treasury
19
Conclusion
Thirty-Third Report - Underpayments of …
The Department told us that it began exploring the potential for underpayments from April 2020, following a number of complaints by individual pensioners and a campaign by the former pensions minister Sir Steve Webb and Tanya Jefferies of Thisismoney.co.uk from January 2020, who provided the Department with example cases of …
Government response. The errors were brought to the Department’s attention by individual pensioners and third-party reporting. Most notably Sir Steve Webb, the former Pensions Minister, and Tanya Jefferies of ThisIsMoney.co.uk provided the Department with example cases of underpayment from January 2020. The …
HM Treasury
20
Conclusion
Thirty-Third Report - Underpayments of …
Managing Public Money (A4.14) states that ‘when public sector organisations have caused injustice or hardship because of maladministration or service failure, they should consider providing remedies so that, as far as reasonably possible, they restore the wronged party to the position that they would be in had things been done …
Government response. 6: PAC conclusion: In paying pensioners, a lump sum of their arrears, the Department may not be fully restoring them to the position that they would be in had the Department paid them correctly in the first place. 6a: PAC …
HM Treasury
21
Conclusion
Thirty-Third Report - Underpayments of …
Some of those who contacted the Department prior to the LEAP exercise starting in January 2021 received special payments of interest on top of their underpayment.54 The Department chose to stop paying interest on arrears, citing value-for-money considerations and comparability of treatment in other LEAP exercises.55 When we challenged the …
Government response. 6: PAC conclusion: In paying pensioners, a lump sum of their arrears, the Department may not be fully restoring them to the position that they would be in had the Department paid them correctly in the first place. 6a: PAC …
HM Treasury
22
Conclusion
Thirty-Third Report - Underpayments of …
Since our evidence session Sir Steve Webb has also drawn our attention to a potential systemic error affecting divorced pensioners. The NAO report states that “the Department did not find any significant evidence that it had failed to properly process cases where a pensioner had notified it of their divorce”.58 …
Government response. 7.2 The department undertakes a yearly review of a randomly selected sample of benefit cases. In reviewing a recent sample of 1500 state pension cases, the department did not find official error specifically relating to divorce. In addition, the department …
HM Treasury