The HM Revenue and Customs (HMRC) has recently announced a significant payment plan aimed at correcting historical state pension underpayments affecting around 210,000 seniors, mostly women. The issue arose due to missing Home Responsibilities Protection (HRP) credits, which are National Insurance credits that protect pension rights for individuals caring for children or others.
These credits were not recorded correctly on some National Insurance records, resulting in underpaid state pensions. The Department for Work and Pensions (DWP) estimates a total of £1.3 billion is owed to the affected pensioners, which equates to roughly £5,000 for each eligible person.
HMRC Payment
The problem primarily affects women who claimed child benefits between 1978 and 2000. During this period, child benefit claim forms did not always require a National Insurance (NI) number, leading to HRP credits being left off some records. HMRC and DWP have now joined forces to rectify the error, notifying the affected pensioners by mail.
Those in their 60s and 70s are the first to receive letters from HMRC, with payments expected to follow. The estimated amount per recipient is £5,000, although the payment could be less for individuals who have passed away, with the average for deceased pensioners around £3,000.
Eligibility
To qualify for the £5,000 HMRC payment, there are several criteria that pensioners need to meet:
- Claimed Child Benefit: The claimant must have received child benefits between 1978 and 2000, in their own name and not in their partner’s.
- HRP Eligibility: The claimants should have been eligible for HRP credits, which apply to individuals caring for children under 16 or disabled dependents.
- No Reduced Rate Stamp: Women who paid the “married woman’s reduced stamp” will not qualify, as this form of contribution does not accrue the same state pension rights.
- Age Considerations: The pensioners must have reached state pension age after April 5, 2010, as HRP credits would then be clearly displayed in their NI record.
Those who do not meet these criteria may not be eligible, but it is recommended to check their NI record for any missing credits and follow up if any discrepancies are found.
Payment Dates
As of now, HMRC has not released specific payment dates for the £5,000 compensation. However, the DWP and HMRC plan to address the correction process over an 18-month period, which began in early 2024. During this time, they will correct affected records by adding any missing HRP credits from 1978 to 2010.
Eligible individuals will receive letters detailing the payment, the correction made, and how it will affect their state pension going forward. While some payments may be processed quickly, it could take months for all cases to be fully resolved.
Latest Developments
HMRC’s initiative involves a large-scale review and correction campaign to update NI records accurately. Around 210,000 seniors have been identified for possible reimbursement. The affected pensioners are being informed via letters often referred to as “brown envelopes.” Since late 2023, the DWP has been working on adjustments to state pension entitlements to account for previously unrecorded HRP credits.
The systematic approach includes updating NI records to reflect the missing credits, ensuring that future state pension calculations are accurate and owed amounts are reimbursed. Importantly, if someone suspects they have been underpaid but haven’t received a notification, they can take steps to verify their situation.
How to Check
To determine if you are among the 210,000 affected, here’s what you can do:
- Review Your NI Record: Check if your NI record shows any missing HRP credits, especially for years when you were eligible for HRP.
- Use the Online Pension Checker Tool: The UK government’s website offers an online service to check state pension records.
- Contact HMRC’s Helpline: For those who prefer direct assistance, the National Insurance helpline can provide information on any unrecorded credits.
- Submit a Claim for Missing HRP Credits: If there are missing HRP credits, fill out form CF411 to request a correction.
Keeping up with official updates from the DWP and HMRC is crucial for the latest news on this payment process.
The campaign aims to finally address decades-old issues in pension entitlements for many women. Although it is a long-overdue correction, the planned reimbursements will provide financial relief and restore fairness in the state pension system.
FAQs
Who qualifies for the £5,000 HMRC payment?
People who claimed child benefits between 1978 and 2000, with missing HRP credits.
When will the £5,000 payments begin?
Payments are expected to be processed over the next 18 months from early 2024.
How can I check if I’m eligible?
Review your NI record or use the government’s online pension checker tool.
What if a deceased relative was underpaid?
An average payment of £3,000 will be made for eligible deceased individuals.
Can men receive the £5,000 payment?
Yes, if they were eligible for HRP credits and meet the criteria.
