More than 100,000 pensioners could be owed £5,000 in extra payouts following a deleted data error.
The Department for Work and Pensions (DWP) admitted that overall around £1bn in state pension payments are owed to an estimated 187,000 people because of the historic errors.
The Government has announced plans for a large-scale write-out to parents who made a claim for Child Benefit before May 2000, as it attempts to define who it owes and how much.
The errors were found during an audit of National Insurance records 15 years ago, which resulted in £85m being paid out at the time.
The Government has announced plans for a large-scale write-out to parents who made a claim for Child Benefit before May 2000, as it attempts to define who it owes and how much
FlickrHowever, thousands more people have been affected and the amount owed is far larger than initially thought.
The mistake mostly affects mums who claimed National Insurance credits while they were looking after their children at home, which failed to appear on their record.
If an unemployed individual had been claiming Child Benefit for 15 years, they could be entitled to an additional 15 years of National Insurance (NI) contributions.
As such, these 15 years of lost NI credit could be worth £4,543 in additional state pension per year, or £68,145 over 15 years (not factoring in inflation).
Sir Steve Webb, partner at LCP and former Minister for Pensions, said: “The scale of these errors is huge. It is shocking that so many women have been underpaid so much money.
“This makes it essential that things are put right as a matter of urgency.”
Those affected by the error will likely be women in their 60s and 70s who made a claim for child benefit before May 2000.
For anyone who made their claim without including their National Insurance number, it is possible their credits may not have been transferred to their NI account.
If an unemployed individual had been claiming Child Benefit for 15 years, they could be entitled to an additional 15 years of National Insurance (NI) contributions
PATom Selby, from broker AJ Bell, said the administrative error by the Government was “unforgivable”.
“The most important thing now is that those who have been underpaid are identified as quickly as possible and put back in the position they should have been," he told The Telegraph.
"Tragically, it is inevitable some will have died before they can receive the compensation they are owed.
”It is crucial if you receive post from DWP that you open it and act upon it. You can make your claim online – but if you do nothing, you will get nothing.”
