Thousands of women across the UK are due substantial back payments from their State Pension, with many set to receive nearly £8,000. This follows an investigation by the Department for Work and Pensions (DWP), which uncovered historical payment errors affecting older people, primarily women. These discrepancies were linked to missing periods of Home Responsibilities Protection (HRP) in National Insurance (NI) records.
The HM Revenue and Customs (HMRC) has sent over 370,000 letters advising recipients to check their State Pension entitlements. The average back payment stands at £7,859, providing significant financial relief to those affected.
What Caused the State Pension Underpayments?
The issue traces back to inaccuracies in National Insurance records, specifically with the Home Responsibilities Protection system. HRP was designed to protect the State Pension rights of individuals (mostly women) who took time off work to care for children or dependent adults.
Key reasons for the underpayments include:
- Missing HRP credits due to administrative oversights.
- Incomplete National Insurance records for certain individuals.
- Errors in transferring data from HMRC to DWP systems.
These errors have affected individuals both below and above State Pension age, highlighting the importance of checking your records regardless of your current pension status.
Who Is Eligible for These Back Payments?
If you believe you might be entitled to back payments, certain eligibility criteria apply:
- Women who claimed Child Benefit before 2010 but did not see it reflected in their NI records.
- Individuals who cared for someone full-time and expected HRP credits to be applied.
- Those whose State Pension age has already passed but suspect underpayment.
It’s vital to verify your National Insurance record through HMRC or the myGov portal to confirm if you are affected.
How Can You Check Your Eligibility and Claim Back Payments?
Here’s a straightforward guide to determine if you’re eligible and how to claim your back payments:
1. Check Your National Insurance Record:
- Visit the HMRC website or log in to your myGov account.
- Review your National Insurance record for any missing HRP credits.
2. Review Child Benefit Claims:
- If you claimed Child Benefit between 1978 and 2010, ensure your NI record reflects the HRP credits.
3. Contact HMRC or DWP:
- Call HMRC for record corrections or reach out to the DWP to address pension discrepancies.
- Be prepared to provide proof of Child Benefit claims or caregiving periods.
4. Await Notification:
- Eligible individuals will receive letters from HMRC outlining steps to reclaim missed payments.
MUST READ: State pensioners urged to unplug five devices before April price rise
What Is the Timeline for Receiving Back Payments?
Once you’ve submitted the necessary documentation:
- The DWP aims to process claims within 12 weeks of receiving accurate information.
- Successful claims will receive a lump sum payment, averaging £7,859.
- Some recipients may also see adjusted future pension payments.
Why Is It Crucial to Act Now?
Even though HMRC is proactively contacting affected individuals, some may not receive letters due to outdated records or missed communications. Taking initiative ensures you won’t miss out on substantial back payments.
Failing to check your records could result in missing out on thousands of pounds that you’re rightfully entitled to receive.
FAQs
How do I know if my State Pension is underpaid?
Check your National Insurance record through the HMRC portal or contact the DWP for guidance.
Why are women primarily affected by these underpayments?
Women who took time off for childcare or caregiving often relied on Home Responsibilities Protection (HRP), which was sometimes inaccurately recorded.
What is the average amount women can expect in back payments?
The average arrears payment is approximately £7,859, though individual amounts may vary.
Will receiving a back payment affect my future pension?
In some cases, your ongoing State Pension payments may be adjusted to reflect accurate entitlement.
How long will it take to receive my payment after claiming?
Most claims are processed within 12 weeks, with successful applicants receiving a lump sum payout.
Do I need to pay tax on the back payment?
Generally, back payments are part of your pension entitlement and are not taxable, but it’s wise to consult a tax advisor.
What if I didn’t receive a letter from HMRC but believe I’m eligible?
You should still check your records and contact HMRC to inquire about potential underpayments.
Is there a deadline to claim my back payment?
While no strict deadline has been set, it’s best to act promptly to avoid missing out on your entitled funds.
Click here to know more.
Aanchal is a passionate writer with a keen interest in storytelling, content creation, and creative expression. She enjoys exploring diverse topics and crafting engaging narratives that captivate readers.
