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Bereaved family members have been requested to repay state pensions that had been wrongly despatched to individuals who have died by the Department for Work and Pensions (DWP).
The DWP has confirmed it has no authorized proper to reclaim the cash however argues that it does so to guard public funds.
Former Pensions Minister Sir Steve Webb says the letter the division sends out to households doesn’t make it clear the repayments are voluntary.
Over the previous 5 years, the DWP mistakenly paid greater than £500m in state pensions and pension credit to the deceased, recovering about half from bereaved family members.
This state of affairs can come up if there’s a delay in reporting a dying – or within the DWP processing it – inflicting additional pension funds to be issued.
As a consequence, a part of that fee might cowl a interval after the individual has died.
In the most recent yr, £144m was overpaid in state pensions by the DWP after an individual’s dying as a consequence of delayed reporting.
The division recovered £67.3m, leaving £76.7m in unrecovered overpayments.
Sir Steve, who’s a companion at pensions consultancy LCP, used a Freedom of Information request to see a replica of the letter the DWP sends out to households and executors.
It revealed that whereas the division asks for the cash to be returned to guard public funds, it doesn’t state that reimbursement is voluntary.
The former minister stated he was “shocked” to be taught the letter doesn’t make clear that returning the cash is not necessary.
Sir Steve argued that this turns pension repayments right into a “lottery” the place some folks ship the cash again whereas others do not.
The former Liberal Democrat politician, who served within the ministry between 2010 and 2015, warned the system disproportionately impacts essentially the most weak, who could also be grieving and unable to query the letter.
He referred to as for a “consistent approach”, urging the federal government both to safe a authorized foundation for recovering overpayments or cease benefiting from “people who don’t know how this system works”.
Radio 4 Money Box listener Dennis stated he had been “caught out” by the process twice, after each of his mother and father handed away.
Dennis defined that he adopted the letter’s directions to “settle all” his mother and father’ affairs.
He added that he “obeys the government and will pay it” as he did not know the reimbursement was not legally required.
Another Money Box listener, Jan, instructed the BBC that her late husband can be “absolutely beside himself” if he knew that over £250 of his pension had been paid again when it did not must be.
Jan stated she was confused when she obtained a letter from the DWP stating her husband had been overpaid, as she had knowledgeable them “immediately” after his dying.
“It was upsetting the way it happened and [the way] the whole thing played out,” she stated.
The Department for Work and Pensions stated in an announcement: “It is not our intention to cause distress, however, we have a responsibility to taxpayers to recover overpayments. We acknowledge this is not always possible.
“Whilst there isn’t a authorized obligation to repay a debt of this sort, we recognise some folks shall be keen to repay cash to which there was no entitlement. We present full contact particulars and encourage anybody with issues to name us.”
For extra on this story take heed to Money Box at 12:00 GMT on BBC Radio 4 or atone for BBC Sounds.
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