State Pension Underpayments and Arrears for Women

Baroness Altmann Excerpts

Monday 21st February 2022 Lords Chamber

Asked by

[Baroness Altmann]

To ask Her Majesty’s Government what progress they have made in correcting State Pension underpayments and arrears for women; what is their latest estimate of (1) the number of women who have had their State Pension increased so far, and (2) the proportion of the total affected by underpayments that this represents; and what steps they are taking to ensure such errors do not occur again.

[The Parliamentary Under-Secretary of State, Foreign, Commonwealth and Development Office and Department for Work and Pensions (Baroness Stedman-Scott) (Con)]

Between 11 January 2021 and 30 September 2021, 38,507 cases were reviewed, 9,491 underpayments identified and arrears of £60.7 million made. We cannot break this down by gender. A further update will be published around the time of the next fiscal event. The department has undertaken steps to prevent future error, including changes to the checking approach, additional learning for staff and, as a failsafe, regularly running a scan to pick up any cases that may have been missed.

[Baroness Altmann (Con)]

I thank my noble friend for her helpful response and for her department’s work. I have two questions: please could she explain why interest is not being added to back payments, as it was earlier for women whose underpayments were corrected after these official errors? Also importantly, I understand that the poorest women are at risk of losing benefits or social care funding when an arrears lump sum exceeds, for example, the £23,250 social care capital disregard. Most of these pensioners probably needed higher pensions and would also almost certainly have spent the money in past years but now risk the arrears being taken back in care fees straight after finally receiving the money. Will the Government consider introducing regulations—as happened after the Manchester bombing—requiring local authorities, to disregard these specific state pension back payments, not future higher pensions, from financial assessments for social care funding or means testing?

[Baroness Stedman-Scott (Con)]

Consistent with other large-scale LEAP exercises, special payments under the DWP discretionary scheme are not routinely made to those who have been underpaid state pension. However, under exceptional circumstances, such as where severe distress has been caused by the way an individual case has been handled, a case may be referred for consideration of a special payment.

On the point that my noble friend raises on social care and the impact of back payments, where a local authority charges a person for their care and support, regulations set limits below which a person’s income and capital must not be reduced by changes. Local authorities may take most of the benefits people receive into account unless it is specifically required to be disregarded by regulations. The responsibility for interpreting and applying the regulations and guidance tests rests with local authorities. I will take the point about legislation back to the department and write to my noble friend.