HM Revenue and Customs (HMRC) has recently confirmed that nearly 400,000 letters (370,018) have been dispatched to older individuals, predominantly women, encouraging them to review their State Pension payments as they may be receiving less than they are entitled to.
The Department for Work and Pensions (DWP) has published data on the progress of rectifying historical State Pension errors, revealing that the average arrears payment currently stands at £7,859. In 2022, the DWP identified a number of State Pension cases where it seemed that historic periods of Home Responsibilities Protection (HRP) were absent, resulting in inaccurate State Pension payments.
Investigations uncovered that this issue pertained to the National Insurance records, managed by HMRC, of some individuals both below and above State Pension age.
To address this, the DWP and HMRC initiated a Legal Entitlements and Administrative Practice (LEAP) corrections exercise to identify and invite potentially affected individuals to apply, correct their records, and receive both arrears and ongoing revised State Pension payments.
According to the latest data, 493,813 people have utilised the online tool at GOV.UK to check if they are missing HRP from their State Pension. Any individual affected by this error is expected to receive any back payments by the end of this year.
The DWP has previously stated that those closest to the State Pension age in their 60s and 70s are being issued letters first. However, anyone who believes they may have been affected can verify their eligibility online using the self-identification tool on GOV.UK.
As of the end of September last year, HMRC had processed 37,289 applications from people over the State Pension age and 5,428 from those aged below 66. To date, the DWP has paid out £42 million in arrears payments.
The DWP estimates it underpaid between £300m and £1.5 billion of State Pension due to errors with the recording of HRP.
HRP was a scheme designed to safeguard parents’ and carers’ entitlement to the State Pension and was superseded by NI credits from April 6, 2010. HMRC is utilising NI records to identify as many individuals as possible who might have been entitled to HRP between 1978 and 2010 and have no HRP on their NI record.
After May 2000, it became compulsory to include a NI number on claims, so people claiming after this point will not have been affected. It’s estimated that tens of thousands of people are due an average of £5,000 in back payments.
How to utilise the online HRP tool
You might still be eligible to apply for HRP, for full tax years (6 April to 5 April) between 1978 and 2010, if any of the following were true:
- you were claiming Child Benefit for a child under 16
- you were caring for a child with your partner who claimed Child Benefit instead of you
- you were getting Income Support because you were caring for someone who was sick or disabled
- you were caring for a sick or disabled person who was claiming certain benefits
You can also apply if, for a full tax year between 2003 and 2010, you were either a foster carer or caring for a friend or family member’s child (‘kinship carer’) in Scotland.
Who automatically qualified for HRP
The guidance on GOV.UK indicates that most individuals automatically received HRP if they were:.
- getting Child Benefit in their name for a child under the age of 16 and they had given the Child Benefit Office their National Insurance number
- getting Income Support and they did not need to register for work because they were caring for someone who was sick or disabled
If your partner claimed Child Benefit instead of you or if you reached State Pension age before 6 April 2008, you cannot transfer HRP.
However, you may be able to transfer HRP from a partner you lived with if they claimed Child Benefit while both of you cared for a child under 16 and they do not require the HRP.
They can transfer the HRP to you for any ‘qualifying years’ they have on their National Insurance record between April 1978 and April 2010. This will be converted into National Insurance credits.
Married women or widows
You cannot receive HRP for any complete tax year if you were a married woman or a widow and:
- you had chosen to pay reduced rate Class 1 National Insurance contributions as an employee (commonly known as the small stamp)
- you had chosen not to pay Class 2 National Insurance contributions when self-employed
If you were caring for a sick or disabled person
You can only claim HRP for the years you spent caring for someone with a long-term illness or disability between 6 April 1978 and 5 April 2002.
You must have spent at least 35 hours a week caring for them and they must have been receiving one of the following benefits:
Attendance Allowance
- Disability Living Allowance at the middle or highest rate for personal care
- Constant Attendance Allowance
The benefit must have been paid for 48 weeks of each tax year on or after April 6, 1988 or every week of each tax year before April 6, 1988.
You can still apply if you are over State Pension age. You will not usually be paid any increase in State Pension that may have been due for previous years.
If you were receiving Carer’s Allowance
You do not need to apply for HRP if you were receiving Carer’s Allowance. You’ll automatically get National Insurance credits and would not usually have needed HRP.
If you were a foster carer or caring for a friend or family member’s child
You have to apply for HRP if, for a full tax year between 2003 and 2010, you were either:
- a foster carer
- caring for a friend or family member’s child (‘kinship carer’) in Scotland
All of the following must also be true:
- you were not getting Child Benefit
- you were not in paid work
- you did not earn enough in a tax year for it to count towards the State Pension
If you reached State Pension age on or after 6 April 2010
Any HRP you had for full tax years before April 6, 2010 was automatically converted into National Insurance credits, if you needed them, up to a maximum of 22 qualifying years.
A full overview of HRP can be found on GOV.UK here