Elderly woman on £11 A WEEK state pension receives almost £19k

An elderly woman who struggled for months to get the Government to investigate why she was on just £11.17 a week in state pension has received a backpayment worth nearly £19,000.

Batul Khanbhai, 70, who will also now get £67.49 a week going foward, first challenged her low pension in 2013.

She resumed efforts to get it addressed in May, after This is Money revealed that many women are being underpaid thousands of pounds in state pension.

We are also hearing from other readers that they are ‘getting nowhere’ in attempts to recover backpayments from the Government, six months after we uncovered the scandal.

State pension scandal: Tens of thousands of women are being underpaid big sums stretching back over many years

The Department for Work and Pensions, which recently promised that staff training was being stepped up, is under cross-party political pressure to address the massive failure. 

Tens of thousands of elderly women could be owed an estimated £100million in the debacle discovered by This is Money and our columnist and former Pensions Minister Steve Webb.

His successor in the government department, Ros Altmann, is calling for an urgent explanation of what has gone so badly wrong with the DWP’s systems.

She says: ‘It is not good enough to try to fob women off with false assurances and perhaps hope they do not come back and challenge later.’

And Shadow Pensions Minister, Labour MP Jack Dromey, says: ‘There is a moral duty on the DWP now to take every step necessary to put right these past wrongs.’

Including Mrs Khanbhai’s case, This is Money has reported on underpayments owed to married women totting up to around £131,000 since April, and heard privately about payouts worth tens of thousands of pounds on top of that.

We have also covered two cases of widows who were underpaid for 20 years and received arrears of £117,000 and £115,000. 

The DWP has apologised to Mrs Khanbhai and her husband and offered her a consolatory payment of £100. Read the Government’s explanation of her case and a full statement below.

>>>Are YOU being underpaid state pension? Scroll down to find out how to check 

Why are some married women being underpaid state pension? 

 Married women who retired on small state pensions before April 2016 should get an uplift to 60 per cent of their husband’s payments once he reaches retirement age too.

Since 2008, the increases are supposed to be automatic, but before that women had to apply to get the full sum they were due.

Find out how to check if you are underpaid and what to do about it below.

DWP staff kept promising couple they would respond within five days

Mrs Khanbhai and her husband Iqbal, 72, of Watford in Hertfordshire, contacted the DWP in May this year to ask for a review of her £11.17 a week state pension after reading press coverage of women being underpaid.

They were asked for their marriage certificate, and say this was sent and returned to them by early June.

The couple say they called the DWP every week after that for an update, and each time were told they would receive a phone call in five days, but this never happened.

‘It was the same old questions, your date of birth, your bank, how much do you get. Every week I rang, and they said five days. They knew everything,’ says Mrs Khanbhai.

After her son wrote to Steve Webb at This is Money, we contacted the DWP on her behalf. Two days after that, Mrs Khanbhai was told her state pension would increase to £67.49 a week and she would be paid £18,771.13, which she received at the end of September.

But the case stretches back further than that, as Mrs Khanbhai had initially queried the size of her state pension in 2013, when her husband reached state pension age. However, she received no uplift to her payments nor any information that she could receive 60 per cent of his basic state pension at that time.

The DWP responded to her query with a letter, a copy of which the couple have given to This is Money, which does not refer to the potential uplift or their marriage certificate.

But the DWP says it wrote to Mrs Khanbhai a further two times in 2013 asking to see her marriage certificate, and received no reply. The Khanbhais are adamant they did not receive those two letters.

Mr Khanbhai, a retired pharmacist, says: ‘They are saying they sent two letters in 2013 about the marriage certificate. We have no knowledge of that. The letter we got in 2013 made no mention of sending the certificate.’

This is Money asked the DWP why Mrs Khanbhai was asked for her marriage certificate, and whether this was usual practice with post-2008 state pension cases, where women who qualify are meant to get automatic uplifts when their husbands reach state pension age.

The DWP says: ‘We would only request a marriage certificate if the marriage is not verified on DWP systems, for example, if a customer has claimed working-age benefits, we may have their marriage verified and we wouldn’t need to request one.

Petition demands search for underpaid state pension 

The Government should trawl its records for all women underpaid state pension, including widows and those who have already died, and pay them or their heirs, says This is Money columnist Steve Webb. 

More than 8,000 people have already signed his petition, which can be found here. 

The Government has to respond if the petition gets 10,000 signatures before 7 March 2021, and it will be considered for debate in Parliament if it reaches 100,000 signatures.

‘In the case of Mrs Khanbhai though, we didn’t have the marriage verified and this is the reason why we needed the certificate.’

Mrs Khanbhai is not able to accept interest on her £18,771 backpayment for religious reasons.

Regarding the £100 consolatory payment it has offered, the DWP says: ‘In terms of the £100 – that was for the service issues when we didn’t respond to Mr Khanbhai’s telephone enquiries within expected timescales; this is when he made numerous phone calls to DWP to query his wife’s entitlement.

‘This decision forms part of our complaints procedures. I think [DWP staff member] explained to Mr Khanbhai, about the complaints procedure when they spoke on the phone. I can assure you such complaints are looked into though.’

Mrs Khanbhai’s son, Murtaza, says that his parents do not feel the £100 consolatory payment offered by the DWP is in keeping with the significance of the issue.

Regarding the DWP’s assertion that two requests for a marriage certificate in 2013 were not responded to, he says: ‘We definitely have no record of receiving such a letter and the only letter they sent we have already shown you which makes no mention of requesting to see their marriage certificate.’  

Dean Russell, the Conservative MP for Watford, responded to his constituent’s case, saying: ‘I was very sorry to read that Mrs Khanbhai was underpaid her state pension. I would strongly encourage anyone who believes they are being underpaid to contact the DWP.

‘I am pleased that the DWP has committed to improving the training of the individuals that are handling such cases, and that Mrs Khanbhai has received the money that she was due.

‘If any other constituents of mine think they may be affected, I would ask that they contact me so that I can escalate matters on their behalf.’

DWP must ‘get to grips’ with system failure 

This is Money has received hundreds of emails from women who believe they are underpaid state pension. We and Steve Webb, our columnist and a partner at LCP, read them all though unfortunately we don’t have the resources to reply to everyone.

But Webb flagged Mrs Khanbhai’s case because her state pension was so small, the other facts given strongly suggested she was being paid incorrectly, and she had waited months to get her case sorted.

‘Mrs Khanbhai has clearly been underpaid her state pension for more than seven years through no fault of her own,’ says Webb, a former Liberal Democrat MP and Pensions Minister in the Coalition government.

Under pressure:  DWP is facing cross-party calls to address £100m state pension failure

Under pressure:  DWP is facing cross-party calls to address £100m state pension failure

‘Her pension should have been increased automatically when her husband retired. As far as we know, DWP do not routinely ask for marriage certificates before putting this automatic uplift in place, so it is hard to see why they did so on this occasion.’

Labour MPs have pressed the Government in parliament to reveal the scale of its probe into state pension failures, how many women are being paid incorrectly and when they would all receive their money. 

Pensions Minister Guy Opperman sidestepped the questions and sought to place the blame on Labour over a rule change in 2008. This introduced automatic payment uplifts for married women who retired on small state pensions before April 2016.

STEVE WEBB ANSWERS YOUR PENSION QUESTIONS

       

Responding to Mrs Khanbhai’s case, Labour’s Jack Dromey says: ‘Yet again, these latest revelations are scandalous and show the lamentable failure of the DWP to get on top of this problem.

‘It is unbelievable that an underpayment totalling nearly £19,000 could happen, and that despite repeated calls by Mr and Mrs Khanbhai to the DWP it still took four months to finally resolve the case.

‘Sadly, as we know already, there are far too many other cases just like this. There is a moral duty on the DWP now to take every step necessary to put right these past wrongs, where women who worked hard all their lives were denied the full pension they were entitled to.’

Lady Altmann, a former Conservative Pensions Minister, says: ‘It is time for the DWP to get to grips with this issue and urgently explain what has gone so badly wrong with its systems.

‘Clearly, many women who should have been living on much bigger pensions have been left in the dark, and even when they phone the department to inquire whether their pension payments are correct, they are wrongly assured they are receiving the right amount.

‘With state pensions being so complicated, it is vital that the public can rely on the department to ensure its public-facing staff understand the system, know what questions to ask or pass on inquiries to experts who can respond correctly.

‘It is not good enough to try to fob women off with false assurances and perhaps hope they do not come back and challenge later.

‘The problem will cost the department potentially significant sums, but the sooner the issue is addressed, the fewer women will be left struggling to make ends meet, or dying in poverty when they could have had more money to live on in their final years.

‘State pensions are a bedrock of retirement income for most women.’

Daniela Jenkins is an adviser to the Women’s Budget Group, an independent network of researchers and campaigners which examines economic policy.

She says of Mrs Khanbhai’s struggle to get a backpayment: ‘This case is yet another sad indictment of current DWP policy which pushes responsibility onto often vulnerable individuals to fight for state pension payments that they are entitled to.

‘The £100 consolatory payment offered barely touches the sides of the interest that would otherwise have been paid in this instance and speaks to a general lack of regard for claimants.

‘I sincerely hope that DWP review their actions in this case and conduct a wider investigation to make sure that other pensioners in this situation, mainly women, are not losing out.’

What does the DWP say?

‘We are aware of a number of cases where individuals have been underpaid state pension. We corrected our records and reimbursed those affected as soon as errors were identified.

‘We are checking for further cases, and if any are found awards will also be reviewed and any arrears paid.’

It adds that married women who are already getting a state pension are required to make a separate claim to have it increased if their husband reached state pension age before 17 March 2008.

And it encourages anyone who thinks they have failed to claim a state pension increase they are eligible for to contact the department.

The DWP says that ‘interest and consolatory payments’ will be considered on a case-by-case basis and depend on individual circumstances. 

Are YOU being underpaid state pension? 

If you think you have been underpaid state pension, Steve Webb’s firm LCP has launched an online tool to help older married women work out if they are being paid correctly. Find out more here.

But Webb stresses that the website is simply designed as a useful tool, and anyone with any doubt about the amount of pension they are receiving should contact the Department for Work and Pensions.

If you are a widow and think you have been underpaid, find out more here.

Meanwhile, many women appear to be struggling to get interest on their belated state pension payments, and it is worth following this up if you receive a backpayment.

This is Money understands the DWP is deciding interest payments based on whether a woman was underpaid for more than a year, whether it was down to government error and whether interest would amount to £10 plus.

Readers can contact Steve Webb at [email protected] Please put DWP CLAIMS in the subject line if it is about this topic.

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