HMRC has discovered that thousands of women are due compensation amounting to £7,859 due to a historical error.
The mistake primarily affected women who gave birth in the 80s and 90s under the Labour Party government’s tax department. As a result, HMRC is now informing these women about their entitlement to a payout, which could be a substantial windfall of nearly £8k. The error pertains to Home Responsibilities Protection (HRP), a scheme designed to reduce the number of years required on your National Insurance record to qualify for the full state pension.
The individuals most impacted by this oversight are stay-at-home mothers who claimed Child Benefit between 1978 and 2000, as per tax experts. For money-saving tips, sign up to our Money newsletter here.
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During that period, if you were at home raising children or caring for someone and receiving either Child Benefit or Income Support, you were eligible for HRP.
However, the system underwent changes in 2010 when HRP was replaced with National Insurance credits.
Regrettably, for thousands of people, their HRP entitlement wasn’t accurately recorded or transferred to their National Insurance record.
This oversight by HMRC, which has now been identified and is being addressed, means some individuals have gaps in their records, reports Birmingham Live.
More concerning is the fact that as a result, they may be receiving less state pension than they’re entitled to, or will be in the future.
The tax department has begun sending letters to approximately 370,000 people.
So far, they’ve identified just over 5,300 cases of underpayment between January and September 2024, totalling around £42 million owed.
On average, each individual is entitled to approximately £7,859. It’s estimated that around 43,000 of the affected individuals have sadly passed away, however, their families can still claim the owed amount.
HMRC is prioritising those who are already of pensionable age and making contact with them first.
To be eligible, you must have been receiving child benefit in your own name (not a spouse or partner), your child was under 16 for the entirety of the financial year in question, and you were not contributing to the married woman’s ‘reduced stamp’.
