Source · Select Committees · Public Accounts Committee
Recommendation 29
29
Acknowledged
In our January 2022 report, we warned that, given the nature of underpayments identified, there...
Conclusion
In our January 2022 report, we warned that, given the nature of underpayments identified, there was a risk that similar, unidentified errors existed in the State Pension caseload.60 In 2021–22 the Department identified several new groups of pensioners potentially affected by underpayment, the most significant relating to Home Responsibilities Protection (HRP). For people reaching State Pension age before 6 April 2010, HRP reduced the number of qualifying years of National Insurance contributions needed for a basic State Pension where someone stayed at home to care for children for whom they received Child Benefit or a person who was sick or disabled. The Department identified that HRP was missing from the National Insurance records of claimants who should have been entitled to it. National Insurance records are held and maintained by HMRC, which was unaware of the issue until the Department flagged it.61 We asked the Department what was its best estimate of the scale of the underpayments as a result of HRP. The Department explained that it did not yet know the extent of the underpayment in relation to HRP because it was dependent on HMRC to help identify affected cases before it could estimate the total value of any underpayment and reimburse pensioners.62
Government Response Summary
The government agrees with the recommendation to work with HMRC to evaluate the extent of the HRP underpayment and provide a timetable for completion. Investigation is underway, but estimates of affected people and costs are not yet available.
Government Response
Acknowledged
HM Government
Acknowledged
6c. PAC recommendation: The department should as part of its Treasury Minute response, work with HMRC to fully evaluate the extent of the HRP underpayment as soon as possible and provide a timetable of when it expects each phase of this process will be completed. 6.14 The government agrees with the Committee’s recommendation. Target implementation date: Summer 2023 6.15 State Pension payments are calculated and administered by the department, based on the National Insurance records maintained by HMRC. 6.16 Activity has been underway in HMRC closely supported by this department, to understand more about the scale, potential causes, and options to correct historical errors relating to Home Responsibilities Protection (HRP). Investigation activity is complex, involving matching Child Benefit claims to National Insurance records to identify customers who may be impacted. 6.17 Estimates of the potential numbers of people affected and associated costs are still being finalised and are not yet available. 6.18 HMRC and the department are planning on the basis that investigation work will continue for several months, allowing the impact on State Pension payments to be quantified and for the next steps for any required corrective activity to be shared during the first half of 2023.