Source · Select Committees · Public Accounts Committee
Recommendation 6
6
In paying pensioners, a lump sum of their arrears, the Department may not be fully...
Recommendation
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 entitlement to other benefits such as Pension Credit, housing benefit or social care provided by local authorities. The Department has demonstrated little interest in accounting for financial consequences of receiving a lump sum in its pensions reassessment and considers it to be the pensioner’s responsibility to advise the relevant authority should their circumstances and eligibility for benefits change. The Department added special payments of interest on top of arrears payments to those who contacted the Department about underpayments before January 2021 but chose to stop paying interest once the formal correction exercise began. The Department argued that it took this decision, jointly with ministers, for consistency with previous correction exercises and to comply with the principles of Managing Public Money. However, we do not think there is a convincing justification for treating those in scope of the exercise differently to those contacting the Department prior to it. With underpayments going as far back as 1985, the Department is unlikely to be restoring the pensioners to a position as if the issue never occurred, as would be expected according to the principles of Managing Public Money. Recommendation: The Department should establish the full extent of the impact on pensioners of receiving a lump sum of arrears of benefit, particularly for larger sums of arrears. It should seek assurance from local authorities that people are not treated prejudicially compared to how they would have been treated had they received the money over their proper period of entitlement. It should, as part of its Treasury Minute, set out how its payment of arrears without interest or further compensation is c
Government Response
Acknowledged
HM Government
Acknowledged
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’ build plans, including where commercial plans will mean that premises can be descoped from its contracts; • signing a material number of contracts to provide evidence on supplier interest in BDUK’s subsidies and the pace at which they’re committed to deliver their implementation plans; and • achieving sufficient clarity on the number of premises likely to be beyond the scope of the programme. 6.4 BDUK expects these actions to have been completed in order to be ready to form more robust profiles for the period beyond 2025 by Summer 2023. While this work is in progress, BDUK will provide information on the outcome of its procurements when they are signed, sharing the expected delivery plans up to 2025 and beyond for each contracted area. 6.5 In March 2021, a call for evidence was made to explore all possible options for improving broadband connectivity for these Very Hard to Reach premises. The government published its response in February 2022 bringing together its analysis and evidence from stakeholders. 6.6 This evidence will be used to assess policy options to understand how best to address the small minority of premises that will be beyond the scope of the programme and unable to access gigabit-capable connections. The department will publish further details later this year. 6.7 As part of its assessment process, the department will consider all available solutions and technology types. As equipment improves and technology standards are updated, it will continue to engage with stakeholders to understand how these technologies can best address Very Hard to Reach premises. 6.8 The department will address this recommendation in its letter to the Committee. Thirty-Third Report of Session 2021-22 Department for Work & Pensions Underpayments of the State Pension Introduction from the Committee The Department for Work & Pensions (the Department) estimates that it underpaid 134,000 pensioners various sums totalling over £1 billion in State Pension, with errors going back as far as 1985. Of these, 94,000 pensioners are estimated to be alive, which represents approximately 0.9% of those currently claiming the pre-2016 basic State Pension. These official errors affect pensioners who first claimed State Pension before April 2016 and who do not have a full National Insurance record or who should have inherited additional entitlement from their deceased partner. Around 90% of the pensioners underpaid are women because of the types of State Pension claim affected. The Department does not expect to trace over 15,000 of the affected pensioners or their next of kin where the pensioner is deceased. On average, the Department estimates that the approximately 118,000 pensioners it can trace could receive payments averaging around £8,900 by the time the payments are made. So far, the Department has found underpayments of between £0.01 and £128,448.37. 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 Department published an estimate of the underpayments in May 2020. The Department started exploring the “potential for error” in basic State Pension from April 2020 and confirmed there was a significant issue in August 2020 when it ran a full scan of its system for people who might be affected. 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 the Committee’s report. Relevant reports • NAO report: Investigation into the underpayment of State Pension – Session 2021-22 (HC 665) • PAC report: Underpayments of the State Pension – Session 2021-22 (HC 654)