Bereaved households requested to return pension overpayments
Bereaved relations have been requested to repay state pensions that have been wrongly despatched to individuals who have died by the Division for Work and Pensions (DWP).
The DWP has confirmed it has no authorized proper to reclaim the cash however argues that it does so to guard public funds.
Former Pensions Minister Sir Steve Webb says the letter the division sends out to households doesn’t make it clear the repayments are voluntary.
Over the previous 5 years, the DWP mistakenly paid greater than £500m in state pensions and pension credit to the deceased, recovering about half from bereaved relations.
This example can come up if there’s a delay in reporting a demise – or within the DWP processing it – inflicting additional pension funds to be issued.
Because of this, a part of that fee might cowl a interval after the particular person has died.
Within the newest 12 months, £144m was overpaid in state pensions by the DWP after an individual’s demise resulting from delayed reporting.
The division recovered £67.3m, leaving £76.7m in unrecovered overpayments.
Sir Steve, who’s a accomplice at pensions consultancy LCP, used a Freedom of Data request to see a duplicate of the letter the DWP sends out to households and executors.
It revealed that whereas the division asks for the cash to be returned to guard public funds, it doesn’t state that reimbursement is voluntary.
The previous minister stated he was “shocked” to be taught the letter doesn’t make clear that returning the cash is not obligatory.
Sir Steve argued that this turns pension repayments right into a “lottery” the place some individuals ship the cash again whereas others do not.
The previous Liberal Democrat politician, who served within the ministry between 2010 and 2015, warned the system disproportionately impacts essentially the most susceptible, who could also be grieving and unable to query the letter.
He known as for a “constant strategy”, urging the federal government both to safe a authorized foundation for recovering overpayments or cease benefiting from “individuals who do not know the way this technique works”.
Radio 4 Cash Field listener Dennis stated he had been “caught out” by the process twice, after each of his mother and father handed away.
Dennis defined that he adopted the letter’s directions to “settle all” his mother and father’ affairs.
He added that he “obeys the federal government and can pay it” as he did not know the reimbursement was not legally required.
One other Cash Field listener, Jan, instructed the BBC that her late husband can be “completely beside himself” if he knew that over £250 of his pension had been paid again when it did not must be.
Jan stated she was confused when she acquired a letter from the DWP stating her husband had been overpaid, as she had knowledgeable them “instantly” after his demise.
“It was upsetting the best way it occurred and [the way] the entire thing performed out,” she stated.
The Division for Work and Pensions stated in an announcement: “It isn’t our intention to trigger misery, nonetheless, we’ve a accountability to taxpayers to recuperate overpayments. We acknowledge this isn’t at all times potential.
“While there isn’t any authorized obligation to repay a debt of this kind, we recognise some individuals will likely be prepared to repay cash to which there was no entitlement. We offer full contact particulars and encourage anybody with issues to name us.”
For extra on this story hearken to Cash Field at 12:00 GMT on BBC Radio 4 or atone for BBC Sounds.
