north mp in call for radical overhaul says it is ‘so complicated even officials don't understand it’
Official errors leading to pension underpayments – report
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Thousands of pensioners in the north have received an incorrect pension credit payment due to official error, according to research by MP Danny Alexander.
He said yesterday that 3,400 people had missed out based on the latest statistics on fraud and error released by the Department for Work and Pensions.
More than £800,000 in overpayments were made to pension credit claimants in the Highlands due to official error and more than £350,000 of underpayments were made by mistake.
In the Liberal Democrat MP’s constituency of Inverness, Nairn, Badenoch and Strathspey, 1,250 pensioners have received an incorrect pension credit payment while almost £300,000 in overpayments and almost £150,000 of underpayments were made to pension credit claimants.
Mr Alexander said: “At a time when food and fuel prices are rocketing it is outrageous that hundreds of thousands of pounds worth of vital benefits are failing to reach hard-up pensioners.
“When the pension credit is so complicated that even officials don't understand it, it is clearly time for a radical overhaul of the system.
“The government must scrap convoluted benefits for pensioners and introduce a universal, higher state pension which increases in line with wages.
“This is the only way to deliver a fair deal for all pensioners."
Pension credit is an entitlement for the over-60s aimed at guaranteeing an income of at least £124.05 a week for single people and £189.35 for couples.
Mr Alexander cited recently-released fraud and error statistics which showed that 36.5% of all pension credit payments were incorrect and that 84% of the mistakes were because of “official error”.
Such error in the pension credit system led to £200million of overpayments and £90million in underpayments last year.
Rosie Winterton, the minister for pensions reform, said: “The vast majority of our pensioners are getting the right amount of pension credit.
“Of all official under and overpayments 70% relate to amounts less than £2 a week.
“We recognise all error is unacceptable and are working harder than ever before to reduce the amount of error in the system."
