Until now, the Department for Work and Pensions (DWP) had assumed it would reach about 9 in 10 of mothers who missed out on payments due to errors on their national insurance (NI) records – and had set aside over £1bn for arrears payment.
It also expects the amount it pays out in arrears to be as little as £104m.
Such years should have generated a form of NI credit which would have helped to boost the state pension of many such women.
This largely arose from claims made before 2000 where it was not required to put an NI number on the child benefit claim form and therefore such claims were not linked to the NI record correctly.
However, the letters told people to use an online checker to see if they were entitled and to use an online claim form to apply. The response to these letters was poor, with recipients put off by the online claim process, thinking the letters might be scams, or not understanding the issue.
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The department now expects to spend just £29.8m more on future corrections and has removed £1bn set aside for such payments in its accounts.
Sir Steve Webb, partner at consultancy LCP and former pensions minister, first raised this issue with DWP more than fifteen years ago and an initial correction exercise was undertaken at the time. But since then the problem has grown considerably and, as things stand, is likely to remain unresolved.
“The government’s letter-writing campaign has been a dismal failure and this was entirely predictable given its reliance on a complicated online claims process.
“It is time for a fresh campaign of direct mail to the women potentially affected, this time making it much easier for women to apply and supported by a fresh publicity blitz”.
The DWP says that their strategy now will rely on revising material on gov.uk, looking at messaging in annual uprating letters, undertaking “regular communications activity through the year”, and “strengthening ongoing relationships with external stakeholder groups”.
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