More than 200,000 people could be due a payout after a past HMRC mistake - potentially it could be worth thousands.
HMRC is currently working to contact people who did not receive full pension payments due to a miscalculation. If you were affected, then you will likely have received a letter - or will do - from the tax office explaining what happened. The underpayments were highlighted on the recent episode of BBC's Morning Live.
Three viewers wrote into the show to share that they had received a letter from HMRC and wanted to know whether it was genuine. Personal finance expert, Fiona Bain, explained what has happened and what you should expect if you get one. Fiona said: "Yes, these letters are real and if you get one in the post, don't ignore it, don't throw it in the bin. This is because it could be key to you getting a bigger state pension."
"HMRC is currently writing to over 200,000 people about something called Home Responsibilities Protection or HRP. This is mainly an issue that affects women who reach state pension age before April 2016, but not exclusively, it can affect men as well."
Iona then went on to explain what HRP was and how it has impacted certain people's state pension. Since 2010, you can get National Insurance Credits if you make a claim for Child Benefit or Income Support. This means if you were out of work or working part-time you would still be eligible to claim the full state pension - you need 35 National Insurance years to claim it.
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Iona said: "So that's been the system since 2010. Before 2010, it was a different system, and it revolved around this thing called home Responsibilities Protection HRP. Now the way this worked was that it was kind of similar to what we've had since 2010. It was there to protect your entitlement to the state pension if you had to take time out to look after someone, and the thing with it is that it was meant to fill those gaps in your National Insurance record. But there was a problem.
"So before 2000, if you made a claim for Child Benefit, you weren't required to put your National Insurance number on the claim form. Now this doesn't sound like a big deal, But what this has meant is that many years down the line for lots of complicated reasons that I won't bore you with basically your HRP entitlement was not registered and logged by the Department for Work and Pensions. In this respect, you essentially disappeared from the system. So that's why so many people have been affected."
Those over pension age are being prioritised and contacted first, and on average those affected could be owed an average of £5,000 each. The main rules for qualifying for a year of HRP from 1978 are:
- You had to be receiving Child Benefit in your own name (not that of a spouse or partner)
- Your child was under 16 for the whole of the financial year in question
- You were not paying the married woman’s "reduced stamp"
If you suspect you have missed out, you should first check your state pension and your National Insurance record. For those who reached pension age after April 5, 2010, any year of HRP/credits should be showing as a complete year on your NI record. If not, then you may have missed out.
For those who reached pension age on or before April 5, 2010, HRP was recorded in a different way and you need to phone the NI helpline to check if there is HRP on your record. The Government has also created an online checker tool on Gov.uk to see if you’re likely to be eligible to make a claim. To claim missing HRP up until March 2010, you need to fill in the form CF411.
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