Thirty-Third Report - Underpayments of the State Pension

Select Committee

Public Accounts Committee HC 654 21 January 2022

Report Status Government responded

Conclusions & Recommendations 22 items (6 recs)

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Government Response (AI assessment · 21 of 22 classified)

Accepted 7

Acknowledged 8

Not Addressed 4

Rejected 2

Government response

Treasury minutes: Government response to the Committee of Public Accounts on the Thirty Third report from Session 2021-22 · published 28 Apr 2022

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Recommendations & Conclusions

5 results

2 Recommendation Not Addressed

The Department’s complacency about the level of underpayments inherent in its approach to administering State...

Recommendation

The Department’s complacency about the level of underpayments inherent in its approach to administering State Pension has led it to fail pensioners. The Department’s highly manual systems and complex State Pension rules has led to calculation errors and the underpayment … Read more

Government Response Summary

The response references clear, ambitious targets and a regulatory environment that stimulates competition and investment in the market. It provides information about gigabit coverage and full fibre networks.

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6 Recommendation Not Addressed

In paying pensioners, a lump sum of their arrears, the Department may not be fully...

Recommendation

In paying pensioners, a lump sum of their arrears, the Department may not be fully restoring them to the position that they would be in had the Department paid them correctly in the first place. The payment of a lump … Read more In paying pensioners, a lump sum of their arrears, the Department may not be fully restoring them to the position that they would be in had the Department paid them correctly in the first place. 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 has demonstrated little interest in accounting for financial consequences of receiving a lump sum in its pensions reassessment and considers it to be the pensioner’s responsibility to advise the relevant authority should their circumstances and eligibility for benefits change. The Department added special payments of interest on top of arrears payments to those who contacted the Department about underpayments before January 2021 but chose to stop paying interest once the formal correction exercise began. The Department argued that it took this decision, jointly with ministers, for consistency with previous correction exercises and to comply with the principles of Managing Public Money. However, we do not think there is a convincing justification for treating those in scope of the exercise differently to those contacting the Department prior to it. With underpayments going as far back as 1985, the Department is unlikely to be restoring the pensioners to a position as if the issue never occurred, as would be expected according to the principles of Managing Public Money. Recommendation: The Department should establish the full extent of the impact on pensioners of receiving a lump sum of arrears of benefit, particularly for larger sums of arrears. It should 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. It should, as part of its Treasury Minute, set out how its payment of arrears without interest or further compensation is c Show less

Government Response Summary

The response outlines milestones for assessing delivery beyond 2025, including market surveys, contract signings, and clarity on premises beyond the programme's scope. It expects to have robust profiles for the period beyond 2025 by Summer 2023.

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7 Recommendation Not Addressed

Given the nature of the underpayments identified there must be a risk that similar, unidentified...

Recommendation

Given the nature of the underpayments identified there must be a risk that similar, unidentified errors exist elsewhere in the State Pension caseload. For example, the NAO report states that “the Department did not find any significant evidence that it … Read more

Government Response Summary

Greensill Capital marketed its salary advance scheme, Earnd, to NHS trusts from 2019 and charged no fee to employers and employees for using the service. Based on a report by the National Audit Office, the Committee took evidence on Monday 15th November 2021 from the Department of Health and Social Care; Crown Commercial Service; NHS Business Service Authority and NHS Shared Business Services Limited.

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10 Conclusion Not Addressed

The Department told us it changed its quality assurance framework over the LEAP exercise and...

Conclusion

The Department told us it changed its quality assurance framework over the LEAP exercise and business-as-usual State Pension processing.21 Following our evidence session the Department explained that, as part of its quality strategy review it reviewed its training products, amended … Read more

Government Response Summary

The Department rejects the Committee's assertion and claims to have been taking action to prevent future errors since Summer 2021 by reviewing its Quality Framework.

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12 Conclusion

A Legal Entitlements and Administrative Practices (LEAP) exercise is a systematic review of cases at...

Conclusion

A Legal Entitlements and Administrative Practices (LEAP) exercise is a systematic review of cases at risk of being underpaid to help the Department ensure it has met its legal responsibilities. The Department for Work & Pensions (the Department) uses LEAP … Read more

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