WPC seeks answers on DWP approach to PPF/FAS arrears

The Work and Pensions Committee (WPC) has written to the Department for Work and Pensions (DWP) to request further information on its approach to paying arrears for members of the Pension Protection Fund (PPF) and the Financial Assistance Scheme (FAS).

The Court of Appeal previously ruled that the cap on compensation paid out by the PPF was unlawful, and backed the PPF’s use of the 'Hampshire uplift' to increase payments to its members and to members of the FAS following a 2018 European Court of Justice judgment..

However, the ruling did not address the underlying assumptions used in PPF and FAS calculations, which prompted uncertainties at the time as to the full impact of the judgment.

In his letter, WPC chair, Stephen Timms, also pointed out that the approach to paying arrears now due is different for members of the PPF and the FAS, which is taxpayer funded and where DWP has more responsibility for decision making.

“PPF members will receive uncapped arrears with interest paid and no time limit,” he explained.

“FAS members will similarly receive arrears with no time limit, but no interest will be paid and a cap, not dissimilar to the one ruled unlawful for PPF members, remains in place.”

In light of this, Timms requested that the DWP set out “in detail” to WPC the reasons for these differences, and confirm whether or not DWP is still in the process of finalising its approach to this case.

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