A BBC finance expert has said more than 200,000 people could be owed thousands in back payments due to a Home Responsibilities Protection (HRP) error by HMRC.
Speaking on BBC Morning Live, Iona Bain said the HRP issue affected parents, predominantly women, who stepped away from employment following the birth of children, as well as those who took leave to care for unwell relatives.
How the HRP error happened
Ms 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 and that could mean that they didn't get the full state pension that they were entitled to."
She added: "So HRP was designed to plug those gaps in their pension record so they didn't miss out. Now HRP ran from 1978 to 2010. There was a big flaw in the system though which is that if you made a child benefit claim after 2000, then you would have needed to put your national insurance number on the claim form in order for your eligibility for HRP to be logged."
Ms Bain revealed that "lots of people did not know that's what they had to do". She said: "So, they didn't provide their NI number and therefore their HRP entitlement was not registered. And that's why people ended up missing out on HRP in their droves as it turns out. And this is a problem that did come to the government's attention in recent years and it embarked on what's called a correction exercise and that is basically government language for writing to anyone who might be affected by this to say hey we think you may be missing out on HRP and as a result not getting the state pension that you're entitled to and we're inviting you to make a claim for that missing HRP."
Who should check their record
It is estimated that 200,000 individuals could still be losing out on HRP. Ms Bain said: "We're talking mainly about women in their 60s and 70s so I think the message is there's still time for you to apply for that missing HRP. Spread the word. If you think friends, neighbours, or loved ones may have been affected by this, too. Then tell them so they don't miss out."
The appeal mirrors one from money expert Martin Lewis, who said one listener who claimed the money got back £31,674 for underpayment of state pension. Mr Lewis outlined which groups of people were most likely to have been affected by the error: "Women currently between the ages of 41 and 90, though it's mainly women of the age of 60s and 70s. But it could be anyone 41-90 who took time away from paid work to look after a child or a person with a long-term disability at any point between 1978 and 2010 who claimed child benefit or income support for the first time before May 2000."
How to check and claim
Mr Lewis said: "So effectively your kids were born before May 2000. You go onto Gov.uk, you find your state pension forecast and you look if you're entitled to the full state pension years. If you're not, then you need to check your gaps in National Insurance years, which you can also do on gov.uk."
He added: "If there are gaps in your record from 1978 to 2010 these were the years you took off work to care for a child or someone with a long-term health condition. You may be missing Home Responsibilities Protection. At that point we're getting technical in what you need to do. Go and look it up there are good guides online on what to do next."
The amount of State Pension a person receives is determined by their National Insurance record and the number of 'qualifying years' they have accumulated. Those who claimed Child Benefit prior to May 2000 without providing their National Insurance Number on the claim may find their National Insurance record does not reflect the correct number of qualifying years of HRP. This could have a direct impact on their State Pension entitlement, with women in their 60s and 70s being the most likely to be affected.
Anyone who first made a Child Benefit claim after May 2000 will be unaffected and does not need to get in touch with HMRC, because providing a National Insurance Number became a mandatory requirement for Child Benefit claims from May 2000 onwards. Class 3 National Insurance credits for parents and carers (CPC), available from 6 April 2010, have been recorded accurately, as have partial periods of HRP.
