Government not to demand repayment of overpaid pension credit

LONDON: The British government has clarified that it will not demand repayment from pensioners of the overpaid pension credit, which is calculated at around 130 million pounds.

The government’s reiteration came in response to fears raised by Conservative shadow minister David Ruffley that the government is planning to ask the pensioners to repay the overpaid pension credit.

Pension reform minister Stephen Timms said the government has written to the pensioners clarifying the issue.

The government, in a parliamentary answer had admitted that overpayment of pension credit in 2004-2005 is estimated to have risen to 2.1 per cent of the total paid.

Timms said there is no demand for pay back. He said when there is a mistake, a letter goes out to the pensioners. “It makes it clear that social security law does not allow us to require repayment,” he said.

“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.

The pension credits system came into being in October 2003 replacing the earlier minimum income guarantee system. For the year to March 2003, the overpayment of MIG to pensioners was estimated at 50 million pounds. However, in the following years, as pension credits were brought in, this had gone up to 100 million pounds and then 130 million pounds.

The department of work and pensions has framed rules to the effect that the extra money would only be clawed back where “there was a misrepresentation of, or failure to disclose, a material fact”. There would be no demand for the money if it was overpaid due to official error.

Ruffley said the figures revealed by the government showed that ministers were running the pension credit system “incompetently”. He said the government will have to explain why overpayments have trebled and give reassurances to affected pensioners that they will not be harassed and treated insensitively by government officials.