Up to 200,000 people could be owed thousands of pounds in back payments following an HMRC error linked to Home Responsibilities Protection (HRP), a scheme that affected Department for Work and Pensions (DWP) State Pensions. BBC Morning Live has heard from personal finance experts about the issue, which stems from a failure to log entitlements for parents and carers who took time off work.
What is Home Responsibilities Protection?
The HRP scheme ran from 1978 to 2010 and was designed to protect the pension rights of parents and carers who took time away from paid employment. BBC personal finance expert Iona Bain explained: "It was a government scheme that was designed to solve a problem that could potentially crop up whereby folks who took time out of work to look after children or relatives who were ill or disabled might find that they had gaps in their national insurance record."
The problem specifically affected parents, mostly women, who took time out of work when they had children, as well as individuals who took time off to care for sick relatives. The issue arose because people claiming Child Benefit after 2000 needed to include their National Insurance number on forms for HRP eligibility to be logged. Many did not know this was required, meaning their entitlements were not registered.
Real case: £28,000 back payment
Money Saving Expert reader Ann emailed Martin Lewis, the BBC and ITV star, to report that she had received a massive £28,000 in back payments for missing State Pension due to gaps in her record now filled by HRP. Ann, who is 75 years old and retired 13 years ago, told Lewis: "For reasons I couldn't understand I was on a reduced State Pension. I wrote to HMRC on several occasions for an explanation as to why I wasn't receiving my rightful amount, without any sensible answer."
She continued: "Now, having gone through the process and questions regarding HRP, I have after seven months received my back payment amounting to £28,000. Thank you Martin 28,000 times."
Who is likely to be affected?
You may be affected if you are currently aged between 42 and 90 and took time away from paid work to look after a child, and you claimed Child Benefit for the first time before May 2000. You may also be affected if your partner claimed Child Benefit but you stayed at home to look after a child or a person with a long-term health condition at any point between 1978 and 2010, or if you did not include your National Insurance number on your claim.
Those who believe they are affected are advised to contact HMRC to check their National Insurance record and apply for HRP to be added, which could result in a State Pension increase and back payments. The process, as demonstrated by Ann's case, can take several months but can yield significant sums.
