The National Audit Office (NAO) has completed its review of Department for Work and Pensions (DWP) errors in the old ‘Basic’ State Pension payments, with findings that around 134,000 people have been ‘short changed’ and not paid enough. It is estimated that the costs to rectify the position and make back payments for state pensions that were due and not paid will £1.053 bn.
Please note this only applies to the older style ‘Basic’ State Pension for this that hit state pension age before 6th April 2016 when the ‘New’ State Pension started.
It is estimated that around 90% of the 134,000 people affected are women. There are actually 3 groups of people that are affected:
Women and Widows Top Up
Many women in the 50s, 60s and 70s had the option until 1977 to pay a reduced ‘married woman’s stamp’. This meant they were not building up a state pension in their own right unless they were in receipt of ‘family allowance’ as it was called at the time, now child benefit. This means that many women have not built up a full entitlement to the old style ‘basic state pension’.
The married woman’s addition is available for women and widows that have not built up enough state pension rights in their own name and is a top up to at 60% of the ‘Basic’ State Pension based upon a husbands national insurance contributions.
Over 80s Pension
The over 80 pension is a State Pension for both men and women aged 80 or over. To be eligible you must receive no ‘Basic’ State Pension at all or a small ‘Basic’ State Pension of less than £82.45 a week. £82.45 per week is the current Over 80s Pension for tax year 2021/22.
People That Have Already Died
It is estimated by the NAO that 40,000 women that were entitled to the above top up have already died and there will clearly be difficult in tracing those people or their heirs. Neither the NAO or the DWP has offered any details yet as to how they will address this.