Recommendations & Conclusions
8 items
1
Conclusion
Thirty-Third Report - Underpayments of …
Acknowledged
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 AI summary
The committee took evidence from the Department for Work & Pensions on the issue of underpayments in State Pension based on a report by the Comptroller and Auditor General.
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HM Treasury
11
Conclusion
Thirty-Third Report - Underpayments of …
Acknowledged
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 …
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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 added that the Department responded to the issue significantly more quickly than previous correction exercises as a result of governance improvements. The Department said that, over time, it hoped to become better at identifying small-scale 16 Q 123 17 Q 3, Letter from Permanent Secretary of the Department for Work & Pensions to the Chair of the Committee of Public Accounts, dated 15 November 2021. 18 Qq 30–33, 35–39, 84–89 19 C&AG’s Report; para 11 20 C&AG’s Report; paras 2.10, 2.11 21 Q 40 22 Q 2; Letter from Permanent Secretary of the Department for Work & Pensions to the Chair of the Committee of Public Accounts, dated 15 November 2021. 12 Underpayments of the State Pension errors that may mask more systemic issues and to use more innovative analytical methods coupled with human quality assessment to improve customer experience.23 For instance, in its follow-up letter to us after the evidence session the Department said that it deployed automation of some processes to improve the processing of letters sent out to customers.24 However, the management information is still lacking in areas such as reporting on State Pension enquiries and complaints and the Department acknowledged that it ‘will not eliminate all official error anywhere across the Department’ despite the exercise it is going through’.25 23 Qq 35, 41 24 Q 2; Letter from Permanent Secretary of the Department for Work & Pensions to the Chair of the Committee of Public Accounts, dated 15 November 2021. 25 Qq 100, 113–117 Underpayments of the State Pension 13 2 State Pension correction exercise
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Government response AI summary
The committee concludes that the management information is still lacking in areas such as reporting on State Pension enquiries and complaints and the Department acknowledged that it ‘will not eliminate all official error anywhere across the Department’ despite the exercise it is going through’.
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HM Treasury
14
Conclusion
Thirty-Third Report - Underpayments of …
Acknowledged
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 …
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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 its Retirement Services division to the LEAP exercise and backfilled their posts from elsewhere in the Department or through new joiners. This placed additional strain on its normal State Pension operations, which already have backlogs as a result of COVID-19 and the prioritisation of new Universal Credit claims during the early part of the pandemic.28 The Department acknowledged that it moved staff ‘possibly too quickly’ and committed to clear the backlog of new State Pension claims by the end of October 2021. It told us that it has seen an increased number of applications for new State Pension in recent months, likely because those who wanted to defer their pension were now claiming it sooner and because of age equalisation effects.29 However, over 3,000 cases remained outstanding as at 4 November 2021 where the Department asked for more information to be provided by claimants.30 Accuracy of the LEAP exercise
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Government response AI summary
The committee concludes that the Department redeployed its more experienced caseworkers from its Retirement Services division to the LEAP exercise and backfilled their posts from elsewhere in the Department or through new joiners, which placed additional strain on its normal State Pension operations.
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HM Treasury
16
Conclusion
Thirty-Third Report - Underpayments of …
Acknowledged
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 …
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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 such pensioners on how to do so. There is no legal obligation on the Department to seek out these pensioners or pay them arrears. The Department will backdate any increased payments by 12 months from the date when a new claim is made. These groups include: • married women, whose spouse or civil partner became entitled to State Pension prior to 17 March 2008; • divorced pensioners who have not informed the Department of the divorce and whose pension could be increased using their ex-spouse or ex-partner’s National Insurance record; and • individuals more than 80 years old who are not already in receipt of basic State Pension, or who currently live abroad and have not yet claimed the uplift.37
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Government response AI summary
The committee concludes 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.
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HM Treasury
17
Conclusion
Thirty-Third Report - Underpayments of …
Acknowledged
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 …
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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 underpayment scenarios. It said it did not want ‘to miss customers who are eligible for a payment’ and would be unwilling to provide misleading information. However, there remain 153,000 records for which the Department says that ‘it is unable to trace’ the information on the national insurance records of their partner, meaning these pensioners may miss out on an uplift.38 It said it updated information on GOV.UK and on the phone system and promised ‘to continue to explore whether it is feasible to broaden out the guidance’.39
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Government response AI summary
The department welcomes the endorsement of action already taken but rejects the Committee’s conclusion and points to information on Gov.uk. It is working to identify those affected and will contact them and is working with registrar's offices to identify next of kin and will provide …
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HM Treasury
18
Conclusion
Thirty-Third Report - Underpayments of …
Acknowledged
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 …
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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 of the Department for Work & Pensions to the Chair of the Committee of Public Accounts, dated 15 November 2021. 35 Q 39 36 Q 77; C&AG’s report, 4.17. 37 C&AG’s Report, para 1.16 38 Q 97 39 Qq 151, 152, 154 40 C&AG’s Report, para 4.14 Underpayments of the State Pension 15 started retaining such records for longer.41 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.42 In some cases, information on next of kin of the deceased is missing, and the Department still does not have a plan to trace them.43
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Government response AI summary
The committee concludes the Department prioritizes living pensioners over the deceased, even when their next of kin may be vulnerable, and lacks a plan to trace the next of kin of the deceased.
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HM Treasury
19
Conclusion
Thirty-Third Report - Underpayments of …
Acknowledged
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 …
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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 underpayment.44 The Department then published an estimate of the underpayments in May 2020. The Department said that it did not consider it to be a significant issue until August 2020, when a scan of its IT systems revealed that many more people could have been affected than it thought previously.45 The Department first provided a detailed breakdown of State Pension underpayments to the public and Parliament in its 2020–21 Annual Report and Accounts, published in July 2021.46 This was followed by a progress update in October 2021, published shortly before our evidence session.47 When the Chair of the Work & Pensions Select Committee tabled a parliamentary question on 15 October 2021 concerning the breakdown of men and women in the backlog for new State Pension applications,48 the Department responded that ‘this information is only available at disproportionate cost’ to the Department. During the course of our evidence session the Department clarified that some of the data requested was available at an aggregate level, though had only recently been available.49 Financial justice
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Government response AI summary
The Department 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 …
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HM Treasury
22
Conclusion
Thirty-Third Report - Underpayments of …
Acknowledged
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 …
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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 However Sir Steve believes the scope of the correction exercise is too narrow and should be extended to included divorced people for the following reasons. He told us that in October 2021 the Department published figures which show that there are 720,000 divorced women on the old state pension system. Although a divorced woman could be entitled to up to a full basic pension of £137.60, 40,000 divorced women are on less than £82.45 per week, suggesting there could be many divorced women losing out. In his view the type of error which caused the underpayments occurs when there is a change of circumstances (husband retires, husband dies, pensioner turns 80) and no pension reassessment takes place; exactly the same issue can arise when someone phones up to report a divorce. He told us that in recent months he has identified several individual cases of divorced women who were being paid the wrong amount (or no pension at all) and in each case the Department has accepted that money is due and has paid substantial arrears.59 53 Q 4, Letter from Permanent Secretary of the Department for Work & Pensions to the Chair of the Committee of Public Accounts, dated 15 November 2021. 54 Q 132 55 Q 133; C&AG’s Report, para 4.3 56 Q 139 57 Qq 144–148 58 C&AG’s Report, para 3.7 59 Letter from Sir Steve Webb to the Chair of the Committee of Public Accounts, dated 7 Dec 2021 Underpayments of the State Pension 17
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Government response AI summary
The committee concludes a potential systemic error affecting divorced pensioners. 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.
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HM Treasury