UK Inquiry Tracker

Underpayments of the State Pension

Public Accounts Committee Closed Inquiry

Opened: 21 Sep 2021 Closed: 7 Apr 2022 Parliament page

In early 2020 the Department for Work & Pensions (DWP) became aware of underpayments of State Pension affecting certain women who reached State Pension Age before 2016 . Subsequent DWP investigations uncovered systematic issues meaning that tens of thousands of people might have been underpaid State Pension for many years. … Read more

6 Recommendations

16 Conclusions

1 Report

1 Oral session

3 Letters

1 Event

Activity timeline 6 events

28 Apr
2022

Report published

Treasury minutes: Government response to the Committee of Public Accounts on the Thirty Third report from Session 2021-22

25 Apr
2022

Correspondence

Joint correspondence from Rt Hon Stephen Timms, Chair, Work and Pensions Committee and Dame Meg Hillier, Chair, Public Accounts Committee, …

21 Jan
2022

Report published

Thirty-Third Report - Underpayments of the State Pension

14 Dec
2021

Correspondence

Correspondence from Sir Steve Webb, Partner, LCP, re State Pension Correction Exercise, dated 7 December 2021

23 Nov
2021

Correspondence

Correspondence from Peter Schofield CB, Permanent Secretary, Department for Work and Pensions, re inquiry into underpayments of State Pensi…

28 Oct
2021

Oral evidence

Underpayments of the State Pension

Oral evidence sessions 1 session

28 Oct 2021

View on parliament.uk

Underpayments of the State Pension

Amanda Reynolds · Department for Work & Pensions Cathy Payne · Department for Work & Pensions Peter Schofield · Department for Work and Pensions

Reports 1 report · click to expand

Title	HC No.	Published	Items	Response
Thirty-Third Report - Underpayments of the State Pension	HC 654	21 Jan 2022	22	Responded

Recommendations & Conclusions

2 results

20 Conclusion Rejected

Thirty-Third Report - Underpayment…

Managing Public Money (A4.14) states that ‘when public sector organisations have caused injustice or hardship...

Managing Public Money (A4.14) states that ‘when public sector organisations have caused injustice or hardship because of maladministration or service failure, they should consider providing remedies so that, as far as reasonably possible, they restore the wronged party to the … Read more Managing Public Money (A4.14) states that ‘when public sector organisations have caused injustice or hardship because of maladministration or service failure, they should consider providing remedies so that, as far as reasonably possible, they restore the wronged party to the position that they would be in had things been done correctly’.50 The payment of a lump sum of arrears may affect the pensioner’s current or future entitlement to other benefits such as Pension Credit, housing benefit, or social care provided by local authorities. The Department told us that it remains the pensioner’s responsibility to advise the relevant authority should their circumstances and eligibility for benefits change. HM Revenue & Customs states that income tax is calculated on arrears of State Pension for the tax year in which the pensioner was entitled to receive it, and not in the year in which a lump sum is paid. Where arrears of State Pension are paid, income tax will only be due on any income that exceeds the personal allowance for the respective tax year.51 However, the Department told us it does not have a clear understanding of all financial consequences of receiving a lump sum on social care provision.52 After our 41 Q 158 42 Q 161 43 Qq 177, 178 44 Qq 108–110; C&AG’s Report, 3.3, 3.5 45 Q 111 46 Department for Work & Pensions, Annual Report and Accounts 2020–21 47 GOV.UK, State Pension underpayments: progress on cases reviewed to 30 September 2021 48 Parliament.UK, State Retirement Pensions, question for Department for Work and Pensions, UIN 56659, tabled on 15 October 2021 49 Qq 68, 69 50 GOV.UK, Managing Public Money, A.4.14 51 C&AG’s Report, para 1.15 52 Q 165–167 16 Underpayments of the State Pension evidence session the Department wrote to us explaining how pensions arrears would affect adult social care provision, benefit entitlement and tax. Specifically, on social care, the Department confirmed that the responsibility to interpret the corresponding regulations sits Show less

Government Response

The government disagrees with the Committee’s recommendation and does not intend to change the current legislative position, asserting it is a long-standing principle of personal responsibility for social care in England.

HM Treasury

View details

21 Recommendation Rejected

Thirty-Third Report - Underpayment…

Some of those who contacted the Department prior to the LEAP exercise starting in January...

Some of those who contacted the Department prior to the LEAP exercise starting in January 2021 received special payments of interest on top of their underpayment.54 The Department chose to stop paying interest on arrears, citing value-for-money considerations and comparability … Read more

Government Response

The government disagrees with the recommendation to establish the full extent of the impact on pensioners of receiving a lump sum of arrears of benefit, particularly for larger sums of arrears, and to seek assurance from local authorities that people are not treated prejudicially compared to how they would have been treated had they received the money over their proper period of entitlement, citing existing regulations and the principle of personal responsibility for social care.

HM Treasury

View details

Government Response AI assessment · 21 of 6 classified

Accepted 7

Acknowledged 8

Not Addressed 4

Rejected 2

Total 6 recs + 16 conclusions

Correspondence 3 letters

25 Apr 2022 Joint correspondence from Rt Hon Stephen Timms, Chair, Work and Pensions Committee and Dame Meg Hillier, Chair, Public Accounts Committee, re State Pension Underpayments, dated 20 April 2022

Parliament page

14 Dec 2021 Correspondence from Sir Steve Webb, Partner, LCP, re State Pension Correction Exercise, dated 7 December 2021

Parliament page

23 Nov 2021 Correspondence from Peter Schofield CB, Permanent Secretary, Department for Work and Pensions, re inquiry into underpayments of State Pension, dated 15 November 2021

Parliament page