Darling promises not to 'claw back' pension overpayments
Darling promises not to 'claw back' pension overpayments
Tuesday 16th December 2008
Alistair Darling is to write-off pension overpayments made to 95,000 retired public sector staff, NHS workers and service personnel.The Cabinet Office today revealed five per cent of public service pensioners paid by the NHS, Teachers, Armed Forces, Judicial and Civil Service pension schemes were paid too much for 30 years.
The total cost is estimated to be £126 million.
While pensioners will not be asked to repay excesses, their future pension payments will be cut.
Liam Byrne, minster for the Cabinet Office, said: "This means that some pensioners will have their payments reduced and others will see increases in their payments in 2009 which are less than the annual inflation uprating."
The problem was put down problems calculating Guaranteed Minimum Pension (GMP) and National Insurance contribution records.
The scandal was brought to light by Vince Cable, Liberal Democrat shadow chancellor, in parliament yesterday.
"One thing the government need like a hole in the head is another administrative disaster like the loss of computer discs, but I am afraid that they have one with public sector pensions," he told parliament yesterday.
He explained a journalist from Radio Ulster had contacted him about the problem with Xafinity Paymaster, the firm charged with paying public sector pensions, and warned it was about to start retrieving the money from the pensioners
"I hope that none of us will face the possibility that large numbers of ex-servicemen will suddenly be faced with bailiffs turning up and asking them to repay overpayments, as we have already seen in the appalling instances involving tax credits," Dr Cable said.
Mr Darling made it clear pensioners receiving too much in their pensions would not be called to repay the cash – effectively writing off the loss.
However, future pension payments will be cut.
The chancellor said: "It will be necessary to adjust what is paid in the future, but the government recognise that there have been such payments for a long time.
"I would not want people to think that we will start clawing back money that has been paid erroneously. Things need to be put right from next year."
The FT reports the loss will be recouped from individual government department's budgets, with the Department of Health likely to face the largest cost.
Helplines to respond to questions and concerns from pensions affected have been set up and advice and guidance has been placed on scheme websites.
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