DWP contacting up to 20,000 benefit claimants who could be due £2000 payout
Around 20,000 people are being contacted by the Department for Work and Pensions (DWP) as they could be due money after a mistake.
The DWP has this week admitted that widowed people with an inherited pension who claimed New Style Jobseeker's Allowance (JSA) during the pandemic may be due cash after they were underpaid benefits. In its guidance, the DWP says it treated income from pensions inherited as the same income as their other pensions.
Income from other pensions can reduce how much New Style JSA you can receive whilst income from inherited pensions does not. The DWP says it will contact around 20,000 people who made claims between March 19, 2020 and November 19, 2022, however, the benefits department told The Mirror it expects a "low proportion" will be eligible for a payment. Text messages and letters will also be sent to claimants informing them of what to do if they have an inherited pension.
New Style JSA is a fortnightly payment you can claim for up to six months if you are unemployed or work less than 16 hours a week. It can be claimed on its own or alongside Universal Credit, however, the difference is that New Style JSA is a "contributory" benefit and you can only claim if you paid enough National Insurance - according to the DWP, this is usually in the two full tax years before the year you make a claim.
This means those affected by the mistake could have missed out on up to 26 weeks of New Style JSA payments which, in 2020-21, sat at £74.70 a week. This equates to a potential payment of around £2,000. However, the first £50 per week of occupational pension income is ignored when JSA is assessed, so you would have to get more than this in inherited pension to claim.
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On the issue, Steve Webb, former Pensions Minister and now a partner at LCP said that people who have good company pensions can significantly reduce and even "eliminate" their New Style JSA payments. Steve reiterated that this should only count if the pension is theirs and not an inherited one from a late spouse or partner.
Steve added: "In this case, the DWP has wrongly been penalising people for inherited pensions and this could have cost some people up to around £2,000. It is well worth anyone who made a claim and was turned down and who was receiving an inherited pension at the time to make inquiries to see if they are owed any money."
According to DWP guidance, you may be owed cash if:
- You made a claim for New Style Jobseekers Allowance between 19 March 2020 and 19 November 2022
- You told us that you had income from a pension
- You had income from a pension inherited from someone who has died
If you think you might've been affected then you can write to the DWP. Without needing a stamp, you can send your query to - Benefit Centre, Freepost DWP BC 38. In your letter, you will need to include:
- Your National Insurance number
- Copies of your pension statements showing the pension is inherited and the amounts of pension paid for the dates of your New Style JSA claim
- The reference "PAN PEN"
- Your bank, building society or credit union account details (if they have changed since you claimed New Style JSA)
If you are due a payment, the DWP will write to you and will pay the money directly into the bank, building society, or credit union account where your New Style JSA was paid in - if your account has changed then it will be paid into the one stated on your claim form.
A DWP spokesperson told the Mirror: “New Style Jobseekers Allowance (JSA) provides effective short-term support for those who become unemployed while they look to return to the workplace. We are currently reviewing some claims made between March 2020 and November 2022 as we are aware some inherited pension income may have impacted how much JSA individuals received. We only expect a small proportion of people we contact to be affected.”
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