THOUSANDS of women could be missing out on the full state pension because of an error in the HM Revenue & Customs pension system, the government has admitted.
The shortfall of up to £1 billion developed because the Home Responsibilities Protection (HRP) system, which reduces the number of qualifying years needed for a full state pension from 39 years to a minimum of 20 for women who took time off work to b
ring up children, was flawed. The reduction should be given automatically to women who have received child benefit since 1978, but the system failed to adjust the qualifying pension years for thousands of women who are unaware that they qualify for HRP and therefore not benefiting from a full state pension.
According to Mike Warburton, senior partner at accountants Grant Thornton, the problem may have arisen because, until recently, women claiming child benefit did not need to declare their national insurance number on the form. Warburton also believes that women opting to pay the reduced national insurance rate when they started work failed to build up the required number of qualifying years, meaning they did not qualify for HRP in those years.
Although the issue first came to light in May 2007 and has been pursued by Liberal Democrat MP Steve Webb, the government at first insisted there was no problem to fix. Now it has launched a review of the system, likely to take at least a year.
"With any luck the issue will be identified promptly and the problem rectified so thousands of women can get what they are owed as soon as possible," said Warburton.
It is also believed that at over 70,000 married women could be eligible for backdated pension payments of up to £1,400 to cover the period between turning 60 and their husbands reaching 65. Since 2004 women with gaps in their national insurance records between the tax years 1996-7 and 2001-2 have been able to "buy back" the missing years at a set rate, but the government failed to pass this information to approximately 73,000 women, who will now be contacted.
The full article contains 359 words and appears in The Scotsman newspaper.
