The government has confirmed plans for a large-scale write-out, after it found that people entitled to child benefit before May 2000 may have been underpaid their state pension.

The Department for Work and Pensions (DWP) revealed last year that an error had been found in the National Insurance (NI) records of some savers, mostly mothers, who should have had NI credits for time at home bringing up children, with estimates since suggesting that underpayments relating to errors of this sort could amount to around £100m per year.

The issue impacts those who made a claim before May 2000, as those who made a claim without putting a NI number on their claim may not have had their credits, previously known as Home Responsibilities Protection (HRP), transferred to their NI account.

Those who first claimed child benefit after May 2000 will not be affected and do not need to contact HMRC , as it became mandatory in May 2000 to provide a NI number for child benefit claims.

However, HMRC confirmed that there are no longer records available for everyone who may be eligible for HRP, as child benefit records are deleted 5 years after the claim ends, for data protection.

Given this, HMRC explained that it will use NI records to identify "as many people as possible" who might have been entitled to HRP between 1978 and 2010 and have no HRP on their NI record.

HMRC will then write to people who meet these criteria, to find out if they are eligible to claim.

The DWP will also be taking steps alongside this, helping to recalculate the state pension entitlement for those over state pension age, as well as let those effected know their recalculated state pension entitlement and whether they are due any arrears.

News of the write-out was welcomed by LCP partner, Steve Webb, who suggested that “it is good news that the government is finally taking action to deal with yet more errors in people’s state pension records”.

“Missing out on protection for time at home with children could make a huge difference to a mother’s pension entitlement, and lump sum payments of arrears could run into many thousands of pounds for those who are affected,” he continued.

“I hope that this correction process will be completed as quickly as possible, as far too many people have been underpaid for far too long”.

Agreeing, AJ Bell head of retirement policy, Tom Selby, argued that “the most important thing now is that those who have been underpaid are identified as quickly as possible and put back in the position they should have been”.

“Tragically, it is inevitable some will have died before they can receive the compensation they are owed,” he added.

“For those who are still alive, it is crucial if you receive post from DWP that you open it and act upon it. You can make your claim online – but if you do nothing, you will get nothing from the government.”

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