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The long-term underpayment of state pensioners is a ‘shameful shambles,’ watchdog reveals

PENSIONERS have lost more than £1 billion in underpayments due to Department of Work and Pensions (DWP) errors in a “shameful shambles,” the public spending watchdog reveals today.

The public accounts committee (PAC) says that the underpayments to 134,000 pensioners — most of them women — were caused by errors stretching back as far as 1985.

The victims were widows, divorcees and women reliant on their husband’s pension contributions for some of their pension.

Many have died while owed money.

PAC said that the errors were caused by complex pension rules and dependence on outdated administrative systems.

Correcting the errors is expected to cost £24.3 million in staff costs alone.

Victims who are eventually compensated could find their benefits affected by the back payment.

PAC chairwoman Meg Hillier said: “Departments that make errors through maladministration have a duty to put those it wronged back in the position they should have been, without the error.

“In reality, the DWP can never make up what people have actually lost, over decades, and in many cases, it’s not even trying.

“An unknown number of pensioners died without ever getting their due and there is no current plan to pay back their estates.

“This is a shameful shambles.”

National Pensioners’ Convention general secretary Jan Shortt said: “The reason this disgraceful situation happened in the first place is totally the responsibility of the DWP.

“They must now work with the same diligence to repay pensioners they have underpaid, as they robustly do in chasing overpayments.

“But we also need to know what is in place to stop this happening again.

“The DWP need to update their systems urgently and find alternative ways of engaging with pensioners to give them clear answers to their questions on eligibility.”

Ms Shortt said that many of the women affected by the underpayment will die, or have already died, before the payment is made to them and therefore cannot be compensated.

“Those still with us will never make up the loss incurred,” she said.

“A fair compensation system that does not penalise victims of this incompetence by reducing their benefits because of the repayment of lump sums also requires to be factored in.”


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