DWP and HMRC sending National Insurance 'error' letters after £1.5 billion State Pension underpayment
The Department for Work and Pensions (DWP) and HM Revenue and Customs (HMRC) are sending letters to thousands as they look to rectify a State Pension error. Here's everything you need to know
by Kieran Isgin · ChronicleLiveThis winter, hundreds of thousands of older women could receive a letter from HM Revenue and Customs (HMRC). These letters will inform many that their National Insurance (NI) record may contain missing periods of Home Responsibilities Protection (HRP), which could have impacted the level of Basic or New State Pension they are entitled to.
The Treasury started issuing these letters over a year ago and is working with the Department for Work and Pensions (DWP) to correct any administrative errors as quickly as possible. Approximately 210,000 older individuals - predominantly women - are due a share of underpayments totalling £1.5 billion, equating to around £5,000 each.
Those affected by the error are expected to receive any back payments by the end of next year. The DWP has previously stated that those closest to the State Pension age in their 60s and 70s are being issued letters first.
However, anyone who believes they may have been affected can check their eligibility online using the self-identification tool on GOV.UK.
The DWP estimates it underpaid between £300 million and £1.5 billion of State Pension due to errors with the recording of HRP. HRP was a scheme designed to help protect parents' and carers' entitlement to the State Pension and was replaced by NI credits from April 6, 2010, according to the Daily Record, reports the Manchester Evening News.
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HMRC is utilising National Insurance records to identify individuals who may have been entitled to Home Responsibilities Protection (HRP) between 1978 and 2010 but have no HRP on their record. From May 2000, it became mandatory to include a National Insurance number on claims, meaning those who claimed after this date will not be affected.
It's estimated that tens of thousands of people are due an average of £5,000 in back payments. The Department for Work and Pensions (DWP) has stated that personal representatives can claim on behalf of deceased customers.
HMRC and DWP are also running a wider campaign to ensure everyone potentially eligible is aware of the corrections exercise. Before starting the HRP check, you'll be asked if there are gaps in your National Insurance record.
If you're unable to locate your National Insurance record online or don't know the answers to any of the questions, you can select 'Do not know' and you'll be guided on how to obtain this information. The online HRP tool can still be used to apply for HRP, for full tax years (6 April to 5 April) between 1978 and 2010, if certain conditions were met.
The guidance on GOV. UK explains that most people automatically received HRP if they met certain criteria.
If your partner, rather than you, claimed Child Benefit and you reached State Pension age before April 6, 2008, you cannot transfer HRP. However, if you lived with a partner who claimed Child Benefit while you both cared for a child under 16 and they do not need the HRP, you may be able to transfer it.
The Home Responsibilities Protection (HRP) can be transferred to you for any 'qualifying years' on your National Insurance record between April 1978 and April 2010, which will then be converted into National Insurance credits. But, if you were a married woman or a widow during any complete tax year, you are not eligible for HRP.
If you were caring for a sick or disabled person, you can only claim HRP for the years you spent caring for someone with a long-term illness or disability between April 6, 1978 and April 5, 2002. The person you cared for must have been receiving one of the specified benefits for at least 48 weeks of each tax year on or after April 6, 1988 or every week of each tax year before April 6, 1988.
Even if you are over State Pension age, you can still apply for HRP. However, you will not usually receive any increase in State Pension that may have been due for previous years.
If you were receiving Carer's Allowance, there is no need to apply for HRP as you'll automatically get National Insurance credits and would not usually have needed HRP.
If you were a foster carer or caring for a friend or family member's child, it is necessary to apply for HRP if, for a full tax year between 2003 and 2010, you met certain criteria. All of the following must also be true: If you reached State Pension age on or after 6 April 2010.
Any Home Responsibilities Protection (HRP) you had for complete tax years prior to April 6, 2010 was automatically converted into National Insurance credits, if required, up to a maximum of 22 qualifying years.
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