Department for Work and Pensions (DWP) staff have reverted to making the same errors that penalize low-income savers, despite previous interventions aimed at resolving the issues. These blunders involve failing to account for private and work pension contributions when calculating Universal Credit (UC) payments, thereby reducing the amount individuals receive.
Payments into private and work pensions are intended to be deducted before UC is calculated to encourage retirement saving. While this process is typically automatic for work schemes, reports indicate that some DWP staff have refused to accept evidence of private contributions. This has led to individuals being unfairly denied hundreds or thousands of pounds.
Richard Spooner, a 48-year-old administrator at a GP's surgery in Cambridgeshire, experienced this issue firsthand, losing £110 per month in Universal Credit. After the case was highlighted by pension expert Steve Webb and reported on, the DWP admitted its error, stating the issue was 'resolved' and that guidance for staff had been improved. However, Spooner reported that once the case was closed, DWP staff ceased to make correct payments and ignored his subsequent communications. He noted that the errors resumed once the involvement of the media ceased.
In a separate case, a 65-year-old hotel housekeeper from Birmingham, who has dyslexia and poor health, faced similar difficulties. Her requests for her pension contributions to be considered in her UC calculations were repeatedly denied, and her work coach blocked her from submitting proof. Following initial intervention, the DWP stated payments were corrected and guidance reissued, acknowledging the error. Despite this, local staff made the same mistake again the following month.
When both cases were raised with the DWP a second time, Spooner received £660 in arrears, and the housekeeper received £132. The DWP stated that additional guidance had been provided to staff.
Steve Webb, a former Pensions Minister, commented on the recurring pattern, expressing concern that individuals saving for retirement are being wrongly informed that their pension contributions are not deductible. He emphasized the shock of seeing previously resolved cases go wrong again within months. Webb called for a system that does not require individuals to be experts in benefit law and for DWP staff at all levels to receive thorough training to apply rules consistently.
Webb suggested that the number of reported cases indicates a larger problem than the DWP may realize and urged for comprehensive checks to identify more individuals who may be missing out on their entitlements.
A DWP spokesperson acknowledged the corrections made in these instances and stated that both customers were contacted directly. The department noted that private pension contributions of this nature affect a small percentage of UC claimants and that efforts are ongoing to improve staff guidance. The DWP advised any claimant who believes their UC award is incorrect due to personal pension contributions to raise the issue through their journal. Those receiving UC and making private pension contributions who suspect their payments are incorrect are encouraged to contact [email protected].