The DWP says my late mother was not receiving the state pension she was entitled to, so who inherits that money? STEVE WEBB answers

Steve Webb answers his 400th question from a This is Money reader today. Look out for a series of articles and events to celebrate this milestone throughout this week.

The DWP has told me that my late mother is owed five years of pension credits.

Would this be part of my mother’s estate or are payments made directly to next of kin?

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Steve Webb answers: I assume you are referring here to the missing National Insurance credits to help with your deceased mother’s state pension.

When I first started challenging the Government over gaps in the National Insurance records of thousands of mothers in the late 2000s, I didn’t expect that 15 years later they would still be trying to sort out the problem.

The letter she received is part of a massive exercise being carried out by the Government to identify people (mostly mothers) who may have lost the protection of their state pension record because of the time they spend at home with their children.

When it was initially introduced in 1978, the scheme was known as Home Liabilities Protection (HRP) and since 2010 this protection has been offered through a system of National Insurance credits.

The problem arose because before 2000 it was possible to apply for child benefit without including a social security number.

The problem is that this information is used to enter HRP or NI credits into a separate computer system. If the NI number does not appear in the child benefit computer system, the comparison may never be made.

Last year, the DWP admitted there could be almost 200,000 people who had not received help and set aside more than £1bn for possible state pension arrears.

But by the end of March 2024, it had reviewed only 419 cases, suggesting we are at the beginning of a very long journey.

Last week, HMRC said it has already written to more than 250,000 people over pension age who are potentially eligible and is starting to write to those below pension age.

Anyone who has received such a letter should be sure to respond so that their position can be verified.

What happens to affected people who have already died?

The DWP admits that of those 200,000 people who believe they might eventually be eligible, around 43,000 have sadly died without ever receiving their correct pension.

Now that she has been told her late mother was missing years of NI credits, the DWP should reassess her state pension and determine whether she should pay any arrears.

It is worth mentioning that adding the HRP does not always lead to an increase in the right to state pension and therefore does not always lead to a late payment.

In some cases, the woman in question had so few years of actually paid-in National Insurance that, even with the addition of the HRP, she still did not have enough to qualify for a pension in her own right.

And some women reached retirement age after their husband had retired and went straight into receiving a pension based on his record, so small changes to their own record may not make any difference to their entitlements.

However, if we assume that there are some outstanding arrears, the DWP then has to find someone to pay them to.

Generally, if the DWP has details of a surviving spouse, it will pay any arrears lump sum to that person.

Otherwise, it would be necessary to locate other “next of kin”, such as a surviving son or daughter.

In some cases, the deceased person may have indicated in their will that their “worldly goods” should go to someone else, but the DWP does not have access to people’s wills and I’m sure they don’t want to get anywhere near any potential disputes over who should benefit.

For that reason, you will simply pay the “next of kin,” regardless of what the will says.

If there are multiple claims, payment may be split and each party wishing to claim such arrears must complete a BR330 or SPL25D form.

Typically, one of these would be sent along with the letter notifying the family of any delays.

One final point that may be relevant to other readers is that if you receive a letter from a loved one who is no longer with us, you can still complete the HRP application form posthumously.

The way this works is that you fill out the form on behalf of the deceased person, but then sign it yourself and explain why you are doing so.

You should then be able to apply for any outstanding HRP and, in due course, receive any overdue payments.