"Lump sum payments of arrears could run into many thousands of pounds for those who are affected."
In its annual report last year, DWP reported that an error had been found in the National Insurance records of some people – mostly mothers - who should have had NI credits for time at home raising children.
At that stage, DWP said that they were unable to estimate the scale of the problem, though subsequent DWP ‘fraud and error’ statistics implied that underpayments relating to NI errors of this sort could amount to around £100m per year.
An update on the figures is expected to be included in the DWP’s imminent 2023 annual report which will, for the first time, put a figure on the amount underpaid to mothers whose NI credits for time at home with children is missing on their NI records.
Ahead of the report, the Government has announced that in Autumn 2023 it will begin a large-scale write-out to parents who may be affected. The people in scope will mainly be women in their 60s and 70s who made a claim for Child Benefit before May 2000. If they made a claim without putting a National Insurance number on their claim it is possible that their credits may not have been transferred to their NI account from the Child Benefit computer. These credits were previously known as ‘Home Responsibilities Protection’ or HRP.
HMRC say that they will be writing to people who have no HRP on their record and who have gaps in their NI record between 1978 (when HRP was created) and 2010 (when HRP turned into NI credits). Where errors are found, NI records will be corrected and DWP will then recalculate state pensions and pay arrears where appropriate.
LCP partner and former pensions minister, Steve Webb, said: “It is good news that the Government is finally taking action to deal with yet more errors in people’s state pension records. Missing out on protection for time at home with children could make a huge difference to a mother’s pension entitlement, and lump sum payments of arrears could run into many thousands of pounds for those who are affected. I hope that this correction process will be completed as quickly as possible, as far too many people have been underpaid for far too long”.
