Errors in State Pension Due to Home Responsibilities Protection (HRP)
The Department for Work and Pensions (DWP) estimates it has underpaid between £300m and £1.5billion of state pension because of errors with the recording of Home Responsibilities Protection (HRP). HRP was a scheme designed to help protect parents’ and carers’ entitlement to the State Pension and was replaced by NI credits from April 6, 2010.
HMRC is using National Insurance (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. It is estimated tens of thousands of people are due an average of £5,000 in back payments. HMRC and DWP are also conducting a wider campaign to ensure that everyone who may be eligible is aware of the corrections exercise.
Could a Missing HRP Record Affect Your State Pension?
If HRP is missing from someone’s NI record, it does not necessarily mean that their State Pension calculation is wrong, but it could be, especially if they took significant time-out from employment to raise a family.
The Exchequer Secretary to the Treasury has stated: “The State Pension is the foundation of state support for people in retirement. We are urging people to check their National Insurance records to make sure they will receive the pension they deserve.”
Limited Records and Ongoing Repayments
Unfortunately, HMRC delete child benefit claims after 5 years so they do not actually know who may be affected, they are contacting people who they think may be affected. Permanent Secretary, Peter Schofield has confirmed that the DWP has already paid out over £700m and that the team are making good progress, despite a slow rate of individuals approaching the department about this issue.
We would therefore advise checking your own NI records rather than waiting for a letter from DWP/HMRC to arrive. There is no time limit for applying for HRP if it has not been awarded.
Anyone who may have claimed Child Benefit before May 2000, when it was not mandatory to provide your National Insurance Number on your claim, may not have the correct number of years for State Pension purposes on their NI record, if you first made a claim after May 2000, you will not be affected.
Who Can Apply for HRP?
You may still be able to apply for HRP, for full tax years (6 April to 5 April) between 1978 and 2010, if:
• you were claiming Child Benefit for a child under 16
• you were caring for a child with your partner who claimed Child Benefit instead of you
• you were getting Income Support because you were caring for someone who was sick or disabled
• you were caring for a sick or disabled person who was claiming certain benefits
You can also apply if, for a full tax year between 2003 and 2010, you were either:
• a foster carer
• caring for a friend or family member’s child
How to Check and Apply
Before you start the online HRP check you will be asked if you have gaps in your National Insurance record. If you cannot find your National Insurance record online or do not know the answers to any of the questions, you can choose ‘Do not know’ and you’ll be told how to get this information.
Should you need to apply for HRP, or if you believe your record to be incorrect you should fill in form CF411 ‘application form Home Responsibilities Protection (HRP)’.
For more information or advice about your HRP application, you should contact HMRC here.
If you have any questions about the contents of this article, or any other personal tax affairs, contact us here and a member of our tax team will be in touch.