BEREAVED relatives have been getting letters in the post telling them they need to pay back their loved ones state pension.
The Department for Work and Pensions (DWP) is writing to families informing them they need to return pension payments made in error.
Former pensions minister Sir Steve Webb said these letters do not make clear that repaying the money is voluntary.
The DWP overpaid more than £500million of state pension and pension credit payments into accounts of those who had died over five years and has only recovered around half of it.
These direct payment after death (DPAD) overpayments happen if the DWP isn’t notified of the death in time to stop a payment.
Though these are treated as non-recoverable and aren’t actually enforceable by law, the DWP can request the money back as a voluntary payment.
It says it has a responsibility to taxpayers to attempt to claim it back.
Because the DWP makes pension payments four weeks in later, payments can end up being made for a period after the pensioner has died, Sir Steve said.
He said: “It’s not a blunder, it’s just a feature of the system.
“The question is, what should happen then?
“And the bit that struck me as odd is that DWP try to get the money back, but don’t have a legal right to insist.”
Sir Steve, who now is a partner at pension consultants LCP, sent a freedom of information request (FOI) to receive a copy of the letter that gets sent to reclaim overpayments.
He pointed out: “Nowhere does it say that this is voluntary.
The letter has an FAQ section but none of the questions in it are “do I have to do this?”, Sir Steve noted.
He added: “And the result, I fear, is that it’s a lottery, and the losers of the lottery are people who are intimidated or frightened or upset by a letter.
“You know, they’ve just been bereaved.
“They get a letter from the Government demanding hundreds of pounds back, and they just send it because they think they have to.
“They don’t want, you know, they perhaps fear a knock at the door kind of thing, whereas other people, who perhaps are aware they don’t have to pay it back or just choose not to, don’t.”
Either the law should state that everyone is obligated to pay the money back or the Government should stop requesting repayments altogether, Sir Steve explained.
He said: “This kind of halfway house of … we know that it’s not mandatory when we send the letters, but we’re not going to tell you…that doesn’t seem right to me.”
The DWP acknowledged that there is no legal obligation to repay such overpayments but said it has a responsibility to attempt to recover the funds.
A DWP spokesperson said: “It is not our intention to cause distress, however, we have a responsibility to taxpayers to recover overpayments. We acknowledge this is not always possible.
“Whilst there is no legal obligation to repay a debt of this type, we recognise some people will be willing to repay money to which there was no entitlement. We provide full contact details and encourage anyone with concerns to call us.”
It’s understood that no further letters are issued requesting payment if the DWP does not receive a response and that an initial recovery is attempted from the bank where the payment was made or from the deceased’s next of kin.
What are state pension errors?
STEVE Webb, partner at LCP and former Pensions Minister, explains what state pension errors are and how they can occur:
The way state pensions are worked out is so complicated that many thousands of people have been paid the wrong amount for years without even realising it.
The amount of retirement pension you get usually depends on your National Insurance (NI) record.
One big source of errors has been cases where NI records have been incorrect, particularly for years spent at home with children.
This is a system known as ‘Home Responsibilities Protection’.
Alternatively, particularly for older pensioners, the amount you get can depend on the NI contributions made by your spouse.
Errors have arisen where the Government has failed to adjust the pensions of married women when their husbands retired or failed to increase pensions when someone was bereaved and lost a husband or wife.
Although the Government has spent years trying to fix these problems, there are still many thousands of people – many of them older women – on the wrong pension.
If you have always thought that your pension seems low, then it is worth contacting the Pensions Service to ask them to check, especially if you spent time at home raising children or if you were widowed and your pension didn’t change when your spouse died.
How to complain if you think you’ve been treated unfairly by the DWP
If you believe that the DWP has acted in a way that has caused you harm or has treated you unfairly, you may be able to make a complaint.
You could make a complaint if mistakes have been made with your case, there were unreasonable delays, you haven’t been kept informed or you feel you’ve been treated poorly.
To make a complaint, you may need your National Insurance number, your full name, address and contact details, which benefit you are complaining about and what happened.
You’ll also need to explain how the situation has affected you and how you would like the DWP to put it right.
It’s a good idea to provide any evidence to back up your complaint, such as conflicting communications, missed timeframes or evidence of a mistake.
If the DWP agrees it’s made a mistake or treated you poorly it will put it right and may offer you compensation.
If it disagrees and you aren’t happy with the outcome, you can escalate your complaint to a senior manager who will call you to discuss your complaint.
You should then receive a “final response”. If you still don’t agree, you can contact an independent case examiner. You must do so within six months of getting your final response.
How does the state pension work?
AT the moment the current state pension is paid to both men and women from age 66 - but it's due to rise to 67 by 2028 and 68 by 2046.
The state pension is a recurring payment from the government most Brits start getting when they reach State Pension age.
But not everyone gets the same amount, and you are awarded depending on your National Insurance record.
For most pensioners, it forms only part of their retirement income, as they could have other pots from a workplace pension, earning and savings.
The new state pension is based on people’s National Insurance records.
Workers must have 35 qualifying years of National Insurance to get the maximum amount of the new state pension.
You earn National Insurance qualifying years through work, or by getting credits, for instance when you are looking after children and claiming child benefit.
If you have gaps, you can top up your record by paying in voluntary National Insurance contributions.
To get the old, full basic state pension, you will need 30 years of contributions or credits.
You will need at least 10 years on your NI record to get any state pension.
