DWP 'significantly underpaid' pensioners despite them doing 'nothing wrong'
A longstanding administrative blunder has left thousands of pensioners significantly short-changed in their retirement, despite not being at fault. The issue impacts those who took a break from paid employment between 1978 and 2010 to care for children or disabled family members, potentially costing them a significant chunk of their state pension entitlement.
The crux of the problem lies in a failure to accurately record Home Responsibilities Protection (HRP), a now-obsolete government scheme designed to safeguard the pension rights of unpaid carers. HRP was established to ensure that those earning below the National Insurance (NI) threshold due to caregiving responsibilities were not disadvantaged in retirement.
Instead of necessitating additional years of NI contributions, HRP functioned by reducing the number of qualifying years required to receive a full basic state pension. For instance, an individual needing 30 qualifying years who spent five years at home caring for children would only need 25 contributing years under the HRP system, reports Birmingham Live.
In principle, HRP credits were meant to be automatically applied to anyone claiming Child Benefit, but in many instances, this did not occur. And individuals were never notified of the deficit.
The blunder has only emerged in recent years, sparking mounting demands for government intervention and payouts for those affected. Numerous individuals hit by the error are now pensioners surviving on less than their legal entitlement, despite having dedicated years to unpaid caring duties.
System breakdowns mean more than 100,000 people now face National Insurance shortfalls that ought not to exist.
People currently aged between 41 and 90, but women in their 60s and 70s are within the most affected age group.
Parents or carers who have taken time away from paid work to look after their children or a person with a long-term illness or disability at any point between 1978 and 2010.
People who have claimed Child Benefit or Income Support for the first time before May 2000.
A Labour Party government spokesperson said: "We have identified and are correcting an issue related to the historical recording of Home Responsibilities Protection on the National Insurance records for people who first claimed Child Benefit before May 2000.
"Our priority is ensuring everyone receives the financial support to which they are entitled and HMRC has begun writing to those likely affected by this issue. The state pension underpayment rate remains low at 0.4 per cent of expenditure."
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