The Parliamentary and Health Service Ombudsman released a report early in March 2020 which contained examples of their casework from 2019. On page 14 is a finding against the DWP for providing misleading information to two complainants concerning changes to their pension arrangements which would disadvantage them financially. This is an interesting uphold for the 6 test cases of 50’s women (WASPI) who argue along the same lines that DWP failed to inform them of changes to their pension arrangements which then penalised them as they reached pensionable age with too little time to make alternative arrangements.
Although it was accepted that the two complainants would lose ‘many thousands of pounds’ PHSO awarded them just £500 and £750 compensation. Neither of these cases were fully upheld as alongside the case studies PHSO released the long-awaited data for its handling of parliamentary complaints for 2018/19. Here it is confirmed that from a total of 1,553 complaints about the DWP, the Ombudsman partially upheld just 4 giving a 0.2% uphold rate with no complaints fully upheld.
Is this what justice looks like? Is this as good as it gets?
The case is printed here in full from The Ombudsman’s Casework Report 2019
Communication of changes to inflation of state pensions
Organisation: Department for Work and Pensions
Complainants N and T complained that the Department for Work and Pensions (DWP) failed to communicate that the introduction of the new state pension system could have a negative long-term impact on people.
Before 2016, the state pension was in two parts, the basic state pension which everyone of State Pension Age got, and the second state pension, which was dependent on people making further National Insurance Contributions (NICs). Employers could also ‘contract out’ from the second state pension and give their employees a private Guaranteed Minimum Pension (GMP) instead. Contracting out meant both the employer and employee paid lower NICs.
When people with GMPs reached State Pension Age, DWP carried out an annual comparison to check if they were receiving the same as they would have done if they had not ‘contracted out’ of the second state pension. The aim was to ensure those with second state pensions and those with GMPs received roughly the same amount after they reached State Pension Age. This annual calculation meant that DWP essentially paid inflationary increases (indexation) to some people with GMPs.
In April 2016 those reaching State Pension Age had the basic and second state pensions replaced by the new State Pension. The amount people get from the new State Pension depends on their NICs. People who had previously ‘contracted out’ from the second state pension made lower NICs, so their starting amount was lower than those who had ‘contracted in’. Those who contracted out would continue to receive their GMP through their employer’s pension scheme.
However, DWP no longer compared the amount people received from their GMP with what they would have got if they had ‘contracted in’ to the second state pension.
Those reaching State Pension Age after April 2016 who had contracted out for long periods no longer benefited from inflationary increases from DWP. Those who did not contract out received annual inflationary increases on the additional NICs to their second state pension. This could amount to a person with a GMP receiving much less than they were expecting to over the course of their retirement, and less than they would receive had they not ‘contracted out’.
When communicating this change, DWP did not explain that people with long periods of contracting out could be significantly worse off. It instead chose to focus only on the benefits of the new State Pension and other separate pension changes. DWP said:
- that any negative impacts for those with GMPs would be offset by making further NICs, so that individuals could receive the full amount of the new State Pension
- an uplift announced to all pensions in 2011 (called the triple lock) would offset any negative impacts.Complainants N and T both reached State Pension Age after the pension reforms took effect and began receiving the new State Pension. They had long periods of contracting out and, therefore, had large GMPs and lower NICs. The amount they received throughthe new State Pension was roughly the same as it would have been if they received the basic state pension (in place before 2016).
However, they would no longer be entitled to inflationary increases, which they were likely to have received if the annual comparison between GMPs and the second state pension had continued to take place.
As a result, over the course of their retirement, Complainant N and Complainant T anticipated losing out on payment of many thousands
of pounds from DWP that they would have received under the old system.
What we found
Our investigation focused on how DWP communicated with individuals in order to help them plan for their financial future.
DWP was aware the pension changes could negatively affect people with long periods of contracting out who were due to reach State Pension Age shortly after the new State Pension was introduced. However, DWP used flawed arguments, saying that negative impacts could be offset for those with long periods of contracting out who were due to reach State Pension Age shortly after April 2016. Despite what DWP argued, we considered:
- these individuals would not be able to make more NICs to offset any negative impacts
- as the triple lock applied to everyone, it would not offset any negative impacts for these individuals in comparison to other groups.
- DWP failed to provide clear, accurate and complete information through its pension forecasts, impact assessments and other literature. This was despite being warned by both the National Audit Office and the Work and Pensions Select Committee that better communication was needed for those with long periods of contracting out.
- DWP failed to make clear that some people could be worse off as a result of the pension reforms. This meant that some individuals were not aware that they might need to consider seeking independent financial advice and might need to make alternative provision for their retirement.
In Complainant N’s case, Complainant N recognised that DWP used flawed arguments. Whilst DWP’s actions did not prevent Complainant N from planning for their financial future, dealing with DWP’s inadequate responses to their concerns caused frustration.
In Complainant T’s case, DWP’s inadequate responses meant Complainant T was not aware until March 2015 that the pension reforms could have a negative impact on them. As Complainant T had retired before 2010, even if DWP had communicated properly it was unlikely they could have taken steps to make a substantive difference to their finances. However, the loss of a longer window of opportunity and the belief that they might have been able to make a difference to their financial situation was an injustice.
Putting it right
As a result of our findings, we recommended DWP should review and report back its learning from our investigations. In particular, it should ensure that its literature clearly and appropriately points out that some individuals who have large GMPs and reach State Pension Age in the early years may be negatively affected by the changes. It should explicitly tell people to check their circumstances and should provide details to the public about how they can do this.
We also recommended that DWP apologises to Complainants N and T for the frustration and inconvenience its actions caused and pay them £500 and £750 respectively.
DWP is due to report back to us on our recommendations by the end of February 2020.
Is this as good as it get’s from PHSO, YES. Sad but true! Don’t expect a fair hearing or a just result.
The name Rebecca Harrison seems familiar… not sure if itâs the same ombudsman but the tricks are the same!
Another example of serious failure by the Department of Work and Pensions and of serious failure by the Parliamentary Ombudsman to provide fair justice to victims. Again allowing the DWP to get off lightly. The compensation is pitiful and a ‘partial’ uphold an insult. The same usual tap on the hand by PHSO to failing Government departments and a request by the Ombudsman to be told what the department has ‘learnt’ from it! Meanwhile a suggestion for a nice letter of apology to the complainants. What a scandal!
In order for complainants to have got to PHSO in the first place, they will have gone through a very stressful, long drawn-out process of being passed from one so called ‘independent’ investigative process to another and then through the filtering system of the complainant’s own MPs. So, these are serious and valid complaints with plenty of evidence, yet the uphold rate a disgrace. The number of complaints about DWP is truly shocking – 1,553 complaints! Yet what is even more shocking is that PHSO partially upheld only 4 and a 0.2% uphold with none fully upheld! There is nothing else to draw from this, except the conclusion that the whole PHSO complaint system is corrupt and certainly not working to support complainants who genuinely suffer greatly as a result of such failure. The smiling faces and blurb on the PHSO website is a complete farce – a lie.
The 1950s womens’ cases will be the same, no doubt all important areas scoped out, manipulated, excused and only ‘6 representative’ cases out of over 4,500 evidenced complaints that went through DWP, then pushed on to the Independent Complaints Examiner (ICE), closed down without investigation and many sent on to the PHSO with no resolution.
The all important question – Is this what justice looks like? Is this as good as it gets?
Yes, this is exactly what PHSO justice looks like whichever department is under investigation and it is as good as it gets. There is no justice here.
“We also recommended that DWP apologises to Complainants N and T for the frustration and inconvenience its actions caused and pay them £500 and £750 respectively.” These amounts are a complete (but very unfunny) joke. It gives DWP a slight slap on the wrist and makes it look like the PHSO takes the matter seriously which if they did would pay an amount which might actually make DWP sit up and take notice.
“DWP is due to report back to us on our recommendations by the end of February 2020.” Is there any sign of this?
As good as it gets ? Next ? In my dreams ?
PHSO correction of blatant ‘ untruths ‘ documented in a patient’s NHS mental health and local authority records, –
said untruths originating from the lead professionals .
All the evidence the PHSO needs is in that patient’s NHS mental health and local authority records.
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My experiences of the Government is that they do their best to deal with anything related to the well-being of people in a derogatory way to ensure they lose out as much as possible. I can say that twice for health matters, but also work and mantenance of roads, specifically the road where I live, so delaying pensions is another avenue.
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My life has changed dramatically since I found out I couldn’t retire at 60 . I found out the year I was due to retire that it would be another 6 years with no warning . I lost my home ect ect because I could no longer work in the care home where I was a career . I started to catch everything till my body was drained of life I’m depressed suicidal got nothing expected to live on 73 a week after bills it leaves me about £15 if I’m lucky the government have hung us out to dry they want us to drop dead so they don’t have to pay any pensions because they have robbed the money to pay for other things
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I’m 63, in the same boat, and even the low paid job I’m in is under threat as the school moved to Academy status. That and I look after disabled husband, not able to work since brain damage in 2012. You’re right they want us so run down we lose the will. Keep on fighting, don’t give up, you’re not alone it’s just that the MSM/Press don’t force this issue.