Recommendations & Conclusions
7 items
3
Recommendation
Thirty-Third Report - Underpayments of …
Accepted
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 …
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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 underpaid under the State Pension regulations. Other groups of pensioners can receive arrears if they make a claim for additional entitlements to the Department, but the Department has provided very little information on which pensioners should do so. The Department maintains it cannot publish guidance for those who may have been underpaid, such as an online assessment of whether it is worth a pensioner contacting the Department about their pension, because it believes it cannot accurately cover all possible underpayment scenarios. Furthermore, the Department’s priority so far has been to focus on living pensioners rather than the deceased, even though some of their next of kin may be financially vulnerable. The Department does not have a plan to trace the estates of the deceased where no up-to-date records of spouses or next of kin are held. Recommendation: The Department should improve the clarity and availability of information on State Pension underpayments, and what people who are concerned that they have been underpaid should do. This should include information for groups the Department finds hard to reach such as the next of kin of deceased customers.
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Government response AI summary
The department welcomes the endorsement of action already taken with their proposed recommendation, although rejects the Committee’s conclusion and refers to existing information on Gov.uk.
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HM Treasury
4
Conclusion
Thirty-Third Report - Underpayments of …
Accepted
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 …
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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 completes in late
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Government response AI summary
The government agrees with the Committee’s recommendation and has allocated additional resource, both from internal moves, and external recruitment to have over 1400 frontline delivery colleagues working on the exercise and staff who had joined for the exercise on fixed term appointments were made permanent …
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HM Treasury
5
Recommendation
Thirty-Third Report - Underpayments of …
Accepted
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 …
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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 that the Department’s routine position is that it does not have the information even when some details are available or may be obtained without excessive cost. Despite a campaign by the former pensions minister, Sir Steve Webb and ThisisMoney.co.uk, from January 2020, the Department did not consider underpayments to be a significant issue until August 2020, meaning that it missed opportunities to identify and resolve the problem sooner. Recommendation: The Department should provide periodic updates to this Committee and the Parliament on the progress of the State Pension LEAP exercise and the speed of processing the backlog in the new State Pension.
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Government response AI summary
The Department agrees to provide periodic updates to the Committee and the Parliament on the progress of the State Pension LEAP exercise and the speed of processing the backlog in the new State Pension and has committed to providing a further update at the next …
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HM Treasury
8
Conclusion
Thirty-Third Report - Underpayments of …
Accepted
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, …
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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, 47, C&AG’s Report, paras 10, 2.3 10 Qq 49, 52 11 C&AG’s Report, para 11 12 Q 31 13 Qq 33, 39 14 Q 39 15 Q 123; C&AG’s Report, paras 1.11, 3.9 Underpayments of the State Pension 11 sure of the impact on other types of demographic groups, it hopes that ethnic minorities should not be disproportionately affected ‘because of the way the system works in practice’. The Department said that 90% of the underpayment cases it was seeing were women, because of the types of state pension claim that were affected.16 Following our evidence session, the Department wrote to us explaining that it had amended its complaints process and introduced a new case management tool which allows more detailed information to be recorded about complaints.17 Quality assurance arrangements
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Government response AI summary
The department has made significant progress to transform customer experiences and replace legacy IT systems through the new Get your State Pension (GySP) service, introduced in 2018. Complex work is now brigaded into specialist areas and revised work instructions have been issued and enhanced checking …
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HM Treasury
9
Conclusion
Thirty-Third Report - Underpayments of …
Accepted
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 …
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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 pensioners.19 There are three levels of quality assurance in State Pension. The quality of a caseworker’s work is assessed by team leaders (Tier 1) and by a central team (Tier 2). The rate of official error is assessed as part of estimating fraud and error across all benefits (Tier 3). However, as the NAO found, “since 2009, Tier 1 and Tier 2 processes focussed on checking changes to case details, such as a change of address or the death of a spouse, rather than the overall accuracy of the payments; and the small sample sizes of Tier 2 and Tier 3 relative to the basic State Pension caseload made it difficult to identify the errors”. In addition, conversations with caseworkers as part of the NAO investigation showed they feel that the Department has too few staff trained on State Pension processes to manage the caseload and perform the expected quality assurance procedures.20It is a fundamental principle of financial control and assurance that more attention should be focussed on those areas where there is intrinsically a higher risk of failure due to human error. The Department failed to apply this principle here even though it was aware of the system’s very high vulnerability to human error.
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Government response AI summary
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. It will share its Quality Framework improvements with the …
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HM Treasury
13
Conclusion
Thirty-Third Report - Underpayments of …
Accepted
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
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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
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Government response AI summary
The government states the recommendation is implemented, detailing how it continues to manage demand and allocate additional resources, including recruitment and internal moves, to the LEAP exercise to maintain its delivery and revised completion date.
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HM Treasury
15
Conclusion
Thirty-Third Report - Underpayments of …
Accepted
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, …
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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, it is likely that at least some errors will continue to be made in the correction exercise, particularly with more complex cases. The NAO also found that it is possible that some pensioners who have contacted the Department to find out if they have been 26 C&AG’s Report, Figure 8 27 C&AG’s Report, para 4.5 28 Qq 59, 65–67; C&AG’s Report, para 4.5 29 Qq 62, 67 30 Q 2; Correspondence with the minister for Pensions and Financial Inclusion – delays to payments for state pensions 31 Q 79; C&AG’s Report, para 4.7 14 Underpayments of the State Pension underpaid were wrongly reassured that their payments are correct.32 The Department told us that since the errors were discovered it has strengthened its quality assurance over the LEAP exercise.33 It wrote to us following the evidence session setting out that the financial accuracy rate in the correction exercise improved over time from 87.4% in Q1 of 2020–21 to 96% as of October 2021, although it acknowledged that ‘there is clearly room for continued improvement’.34 The Department said its main focus has been on upgrading and improving its system for managing new State Pension, though it acknowledged that there will be a ‘long period’ where the old State Pension systems continue to be necessary.35 Clarity of communications
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Government response AI summary
The government states the recommendation is implemented, detailing significant progress in transforming customer experiences and replacing legacy IT systems, enhancing the Customer Account Management system, strengthening quality assurance processes, and implementing IT changes within the LEAP exercise to reduce errors.
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HM Treasury