UK Retirees may be Asked to Repay Pension Benefits

March 10, 2006 ( - Thousands of elderly in the UK could be asked to pay back around £130 million of pension benefits received.

According to news reports, conservative welfare reform spokesman David Ruffley revealed the numbers he obtained in response to a parliamentary question. He said the figures show that Ministers are running the system “incompetently.”

The Government says the errors happened at a time when many staff with no previous experience were learning a new system, the news reports say. Benefits minister James Plaskitt the checking regime was more rigorous and initiatives had been introduced to focus on error. About the overpayments, Plaskitt said, “These figures refer to a period before these measures were introduced and during a time of massive change.”

The rules on overpayments by the Department for Work and Pensions state that money cannot be demanded back from pensioners if it was paid out due to official error, b ut if the payment was the result of incorrect information given, even inadvertently, by the pensioner, then it can be demanded back. Official guidance also states that repayment can be waived “if it would cause hardship, but hardship must not be confused with inconvenience”.

Ruffley said, “Pensioners face the prospect of being rung up by the Department for Work and Pensions asking for its money back. The Government needs to explain why overpayments have trebled and give reassurances to affected pensioners that they will not be harassed and treated insensitively by Government officials.”

On Friday, the British government says it will not require the repayment of £130 million in overpaid pension credits. While thousands of pensioners were overpaid pension credit last year – and a Conservative shadow minister raised fears they may have to repay the money, Pension Reform Minister Stephen Timms told the BBC that the government had written to pensioners, making clear that this was not the case.

According to the BBC, Tims said, “When there has been a mistake, a letter goes out. It makes it clear that social security law does not allow us to require repayment. But of course if people want to, and are willing to pay that money back, we’ll be pleased. But nobody will be forced to pay the money back,” he added.

Rules published by the Department for Work and Pensions state that the extra money would only be clawed back where “there was a misrepresentation, or failure to disclose, a material fact” and that there would be no demand for the money if it was overpaid due to an official error.