People are urged to check if they are eligible for £5,000 in state pension back payments as Government officials struggle to identify all those who owed a refund.
The error mostly affects women in their 60s and 70s who are missing Home Responsibilities Protection (HRP) from their National Insurance (NI) record.
HMRC has said it will be writing to thousands of older Britons who may have been affected by the issue this autumn.
But former pensions minister Steve Webb warned HMRC is making an “educated guess” as it scours the records to work out who is owed cash.
If a person eligible for a payment has died, their next of kin will need to make a claim through the Government website.
The HRP scheme was set up to protect parents’ and carers’ entitlement to the state pension and was eventually replaced by NI credits in 2010.
Tax officials are looking over NI records to identify anyone entitled to HRP between 1978 and 2010 who doesn’t have it on their record.
After May 2000, an NI number had to be included on HRP claims, so anyone who put in a claim after this point will not be affected.
Ministers have estimated that tens of thousands of people are due an average of £5,000 in back payments.
The DWP has estimated that 210,000 people have been underpaid £1.3billion of state pension owing to historical issues with their HRP.
But officials are unsure of the true figure as this could range from £310million to £1.5billion.
A 74-year-old woman from Cornwall received almost £17,000 in back payments with her state pension increased by £30 a week.
She was missing NI credits for several years between 1978 and 1988 and was previously on a state pension of £134 a week, well below the full basic state pension of £156.20 a week.
A 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.
“Most people’s records will be unaffected, and we have launched a new online tool to help people check whether they need to claim. HMRC will also begin writing to those likely to be affected this autumn.
“Our priority is ensuring everyone receives the financial support to which they are entitled, and state pension underpayment rates due to official error remain low at 0.5 percent of expenditure. Where errors do occur, we are committed to fixing them as quickly as possible.”
HMRC will start contacting those affected in order of how close they are to state pension age with those of state pension age being contacted first.
DWP will work out individuals’ state pension entitlement and let people know if they are due any arrears.
Who may be due back payments for state pension?
People who meet any of these six criteria are strongly encouraged to contact the Pension Service to see if they could be entitled to state pension back payments:
- Married women whose husband turned 65 before March 17, 2008, and who have never claimed an uplift to the 60 per cent rate
- Widows whose pension was not increased when their husband died
- Widows whose pension is now correct, but who think they may have been underpaid while their late husband was still alive, particularly if he reached the age of 65 after March 17, 2008
- Over-80s who are receiving a basic state pension of less than £80.45
- Widowers and heirs of married women, where the woman has now died but was underpaid state pension during her lifetime
- Divorced women, particularly those who divorced after retirement, to check that they are benefiting from the contributions of their ex-husband.
For the latest personal finance news, follow us on Twitter at @ExpressMoney_.
Source: Expressnews.co.uk