In recent developments, HM Revenue and Customs (HMRC) has proactively reached out to over 370,000 individuals, predominantly women, advising them to review their State Pension entitlements. This initiative stems from the discovery of historical inaccuracies related to Home Responsibilities Protection (HRP) credits, which have led to significant underpayments. Data from the Department for Work and Pensions (DWP) indicates that the average arrears payment amounts to £7,859.
Understanding the Home Responsibilities Protection (HRP) Issue
HRP was introduced to safeguard the State Pension rights of parents and caregivers who took time off work between 1978 and 2010 to raise children or care for someone with a disability. However, investigations have uncovered that numerous National Insurance records lack these HRP credits, resulting in reduced State Pension payments for many. This discrepancy affects individuals both below and above the State Pension age.
Steps Taken to Rectify the Underpayments
In response to these findings, the DWP and HMRC have launched a Legal Entitlements and Administrative Practice (LEAP) correction exercise. The primary objectives are to identify affected individuals, rectify their National Insurance records, and disburse both arrears and adjusted ongoing State Pension payments. As of September 2024, over 493,813 individuals have utilized the online tool on GOV.UK to verify potential HRP omissions in their records.
Progress and Financial Implications
The correction exercise has made notable progress:
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Applications Processed: By the end of September 2024, HMRC had processed 37,289 applications from individuals over State Pension age and 5,428 from those under 66.
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Arrears Paid: The DWP has disbursed £42 million in arrears payments to date.
The DWP estimates that the total underpayment due to HRP recording errors ranges between £300 million and £1.5 billion. This significant variance underscores the importance of affected individuals coming forward to claim their rightful entitlements.
Eligibility Criteria for HRP Credits
Individuals who may have missed out on HRP credits between 1978 and 2010 include those who:
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Claimed Child Benefit for a child under 16.
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Were non-claiming partners in households where the other partner received Child Benefit.
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Received Income Support while caring for someone who was sick or disabled.
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Provided care for a person receiving specific disability benefits.
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Served as foster carers or, in Scotland, as kinship carers between 2003 and 2010.
It’s important to note that after May 2000, including a National Insurance number on Child Benefit claims became mandatory, reducing the likelihood of HRP omissions for claims made post-2000.
How to Verify and Claim Missing HRP Credits
To address potential underpayments, HMRC has developed an online tool available on the GOV.UK website. This tool assists individuals in determining whether their National Insurance records are missing HRP credits. If discrepancies are found, users can apply to have their records corrected. The application process requires details about periods spent caring for children or disabled individuals during the specified years.
Table: Key Statistics on HRP-Related State Pension Underpayments
| Metric | Value |
|---|---|
| Letters Sent to Potentially Affected | 370,000+ |
| Average Arrears Payment | £7,859 |
| Total Arrears Paid | £42 million |
| Applications Processed (Over SPA) | 37,289 |
| Applications Processed (Under 66) | 5,428 |
Importance of Timely Action
The DWP aims to complete all arrears payments by the end of the current year. Priority is being given to those closest to or beyond State Pension age, particularly individuals in their 60s and 70s. However, anyone who believes they may have been affected is encouraged to verify their eligibility promptly using the online tool. Proactive action can ensure that individuals receive any back payments due and have their future State Pension payments adjusted accordingly.
Also Read: DWP to Scrap Benefit from April 5 – Thousands of Claimants Notified by Letter
Frequently Asked Questions (FAQs)
Q1: What is Home Responsibilities Protection (HRP)?
A1: HRP was a scheme designed to protect the State Pension entitlements of individuals who took time off work between 1978 and 2010 to care for children or disabled persons. It was replaced by National Insurance credits on 6 April 2010.
Q2: How can I check if I’m missing HRP credits?
A2: You can use the online tool available on the GOV.UK website to check your National Insurance record for missing HRP credits. If discrepancies are found, you can apply to have your record corrected.
Q3: Who is most likely to be affected by this issue?
A3: The issue primarily affects individuals, especially women, who took time off work between 1978 and 2010 to care for children or disabled individuals and did not have HRP credits accurately recorded in their National Insurance records.
Q4: What should I do if I receive a letter from HMRC regarding this matter?
A4: If you receive a letter from HMRC advising you to check your State Pension, it’s important to follow the instructions provided. This could involve using the online tool to verify your records and applying for any missing HRP credits.
Q5: Is there a deadline to apply for missing HRP credits?
A5: While the DWP aims to complete arrears payments by the end of the current year, it’s advisable to check your records and apply for any missing HRP credits as soon as possible to ensure you receive any payments due.
By taking prompt action, eligible individuals can rectify their National Insurance records, secure any back payments owed, and ensure accurate State Pension payments moving
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