State Pension  

Govt urged to review state pension underpayments for divorcees

Govt urged to review state pension underpayments for divorcees
(Unsplash/Kelly Sikkema)

Stephen Timms, chair of the work and pensions committee, has urged the government to review state pension underpayments for divorcees, particularly men.

In a letter to Peter Schofield, permanent secretary at the Department for Work and Pensions, Timms said some divorced men may be affected by state pension underpayments as well as women.

The DWP is currently conducting a legal entitlements and administrative practices (Leap) exercise to see whether widowed pensioners have been underpaid their state pension and the value of any arrears.

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The issue of state pension underpayments was first raised by Steve Webb, a partner at consultants LCP, and relates to entitlements for certain married people, widows and the over-80s dating back to 1992.

Under the old system, married people could claim a basic state pension at 60 per cent of the full rate based on their spouse's contributions, assuming this would be a greater amount than the pension they would receive from their own contributions.

Since March 17, 2008 this uplift should have been applied automatically. Before this date, a spouse had to make a “second claim" to have their state pension increased when their partner turned 65 - and many, particularly women, did not do so.

But another group which could have been underpaid includes men and women who are divorced but do not qualify for a full Category A state pension. 

They may be able to use their former spouse’s national insurance contributions to increase the amount of their basic state pension.

In his letter, Timms said: “For example, a man divorced might be entitled to less than the full amount of the basic state pension based on his own contributions, but to the full amount once the contributions of his former spouse are taken into account. 

“I would be grateful if you could confirm whether such a man, divorced at the time of claiming the state pension, should be entitled to the full amount from the date of claim. 

“In addition, I would be grateful if you would review the decision to exclude divorced people from the Leap exercise given the progress you have now made in correcting underpayments to two groups (married women and over-80s).”

Webb added: “Given the massive scale of errors on state pensions for married women, widows and the over 80s, it is stretching belief to think that divorced people’s pensions have all been worked out perfectly.  

“A particular issue is cases where the DWP was notified of a divorce post-retirement and whether this always resulted in a state pension reassessment. For any given individual the difference could be very substantial, especially where a woman had a poor NI record but her ex husband had a full record.  

“The DWP should do a thorough search for potential errors of this sort”.