Pensions (Hansard, 2 March 2004)

§ Baroness Greengross
asked Her Majesty's Government:
What action they are taking to deal with the backlog in the payment of state pensions.

§ The Parliamentary Under-Secretary of State, Department for Work and Pensions (Baroness Hollis of Heigham)
My Lords, prospective pensioners are sent application forms four months ahead of their expected retirement date. Nationally, we are on target in meeting their claims. However, for complex or sensitive cases—for example, widows and divorcees approaching retirement, who may have issues concerning using their ex-husbands' national insurance records, and so on; or existing pensioners who become bereaved—there is a temporary backlog 551 at the Newcastle centre that will be overcome within three months. Even then, people should still continue to receive their money.

§ Baroness Greengross
My Lords, I thank the Minister for that reassuring reply, but it is obviously unacceptable for so many people to wait a long time for their state pension to be calculated. Why has the delay occurred? Are there people who are not now receiving the money to which they are entitled? Has the department notified advice agencies such as Age Concern about those problems?

§ Baroness Hollis of Heigham
My Lords, I entirely agree with the noble Baroness that it is not acceptable that people should have any worries about relying on payments that are due to them—especially if they have gone through difficult and fragile circumstances. We must certainly not add to that, so I entirely agree with the noble Baroness.
As I understand it, the reason for the delays has been that some work—largely, converting existing order books into direct payment methods—was temporarily moved out of the 26 regional pension centres to the main centre in Newcastle while the local centres were bedding-in pension credit. As that work will shortly return to regional centres and as we have employed an additional 100 staff in Newcastle, I hope and expect to overcome that problem within the next couple of months.

§ Lord Higgins
My Lords, has the Minister listened to the BBC "Money Box" programme, which apparently rang up the department and was told that the number of people not getting their pension on time was six times higher than it was two or three years ago. Currently there are something over 30,000 people not getting pensions on time. Will these people receive compensation? If not, will they receive interest payments, bearing in mind that some of them are being paid six months late?

§ Baroness Hollis of Heigham
My Lords, I read the transcript of the "Money Box" programme. There will always be some situations where people get paid late. We ask people to notify us four months ahead when we send the papers out. Our target is to turn those claims around within two months in standard cases and within three months in complicated or difficult cases. If someone sends their papers in late or if the information is incomplete—perhaps because they are migrant workers where translation is needed—or if the case is complicated because we may be adding together a former husband's national insurance records and current records, there will be some cases that run late. However, that 30,000 figure is now down to 16,000 and coming down by 4,000 a month. We shall be through the backlog by June. New cases coming through are not being added to the backlog, but handled by staff in the ordinary way.
552 Should there be any problems about payments, we can and do make interim payments. We have the help of the advice agencies in doing that. Should there be any evidence of maladministration, obviously we will make payments to meet that.

§ Lord Higgins
My Lords, do they receive interest if they are paid six months late in the same way that a taxpayer who pays late is charged interest?

§ Baroness Hollis of Heigham
My Lords, I believe that, given the current interest rate, interest on the difference between a 60 per cent basic state pension and a 100 per cent state pension over six months will come to a very small sum. However, we certainly could make ex gratia payments in those circumstances.

§ Lord Addington
My Lords, does the Minister believe that the idea of writing to four-fifths of pensioners before the new package was introduced was the right strategy? Would not the Government's current approach have been better and quicker? Have they any model for the introduction of new, more complicated benefits given the level of illiteracy in our population?

§ Baroness Hollis of Heigham
My Lords, I accept the noble Lord's criticism. With hindsight one should have made greater provision for the expected backlog at Newcastle as a result of some work that was normally handled in regional centres going to the special centre at Newcastle which deals with complicated cases. My view is that had we foreseen the backlog, staff would have been employed earlier. However, apart from complicated cases, that even without a backlog may still run late, I repeat that I have no evidence that people are not being paid when they should be. We may not meet our targets but we still get the money out providing people get their forms back in the time allowed. As a result, nobody should suffer from not having the money to which they are entitled.