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 The BBC's Kim Catcheside"Many of them will pay the price"  real 28k |
Pensions error to cost millions
The change to Serps is now being delayed
Ministers are to spend at least �2.5bn - and possibly more than �8bn - in an attempt to rectify a "deplorable" mistake which meant thousands of people received incorrect information about their state pensions.
Social Security Secretary Alistair Darling has promised to provide compensation to those who were wrongly informed and may have missed out on cash because of the error.
The cost of addressing the mistake would be at least �2.5bn he told MPs - and a National Audit Office on the affair, published to coincide with Mr Darling's statement, warned that it could be as high as �8.2bn.
The error stems from a change to the State Earnings Related Pension Scheme (Serps) relating to benefits for widows and widowers.
It means most Serps schemes will only pay out 50% to survivors when a partner dies.
Mr Darling said he was now delaying the change - introduced by the Conservative government in 1986 but not due to come into effect until this year - until 2002.
'Entitled to redress'
Many people who joined Serps after 1986 are thought to have done so without being told about the change.
The information was not included in leaflets about Serps, and some benefits staff failed to highlight the change when giving information.
Mr Darling told MPs in a Commons statement: "We believe that when someone loses out because they were given the wrong information by a government department, they are entitled to redress."
He said a protected rights scheme would be set up to provide compensation for people who may have missed out because of the mistake.
Those eligible would be married, have made National Insurance contributions since 1978 and were misinformed after 1986.
'Not appreciated'
Mr Darling said the correct information had initially been published, but only for a year after the change was announced.
And between 1987 and 1996 the information was wrong - which Mr Darling said was "inexcusable".
He said the social security department had "not appreciated" the implications of the error.
Mr Darling blamed the last Tory government for the mistake and said the National Audit Office report and another from parliamentary ombudsman Michael Buckley on the affair provided "a damning indictment of what happened".
He said he would be setting up a special unit to consider claims along with a helpline and a campaign to raise awareness of the situation.
External audits
He said there had been "no clear line of accountability in the department for ensuring the policy changes were properly implemented".
And he said this highlighted a problem running throughout the department: "It was not focused on the people it was meant to serve."
Mr Darling said the policy and operation of pension policy was to be brought together, while Benefits Agency leaflets would now be externally audited by the independent Social Security Advisory Committee.
Mr Darling said: "We are making sure that people do not lose out because they got the wrong information.
"The last Conservative government has to take the responsibility for this mess and I will take the responsibility for clearing it up."
In his report, parliamentary ombudsman Mr Buckley said the department for social security had been guilty of "maladministration".
And the head of the National Audit Office, Sir John Bourn, said the DSS had failed to pick up the warning signs, even when the matter was referred to Parliament in 1995 and began cropping up in letters from MPs in 1997.
He said: "These were serious lapses in the standards of public administration and must not be repeated."
Social Security Secretary Alistair Darling has promised to provide compensation to those who were wrongly informed and may have missed out on cash because of the error.
 Alistair Darling: Blamed mistake on the Tories |
The error stems from a change to the State Earnings Related Pension Scheme (Serps) relating to benefits for widows and widowers.
It means most Serps schemes will only pay out 50% to survivors when a partner dies.
Mr Darling said he was now delaying the change - introduced by the Conservative government in 1986 but not due to come into effect until this year - until 2002.
'Entitled to redress'
Many people who joined Serps after 1986 are thought to have done so without being told about the change.
The information was not included in leaflets about Serps, and some benefits staff failed to highlight the change when giving information.
Mr Darling told MPs in a Commons statement: "We believe that when someone loses out because they were given the wrong information by a government department, they are entitled to redress."
He said a protected rights scheme would be set up to provide compensation for people who may have missed out because of the mistake.
Those eligible would be married, have made National Insurance contributions since 1978 and were misinformed after 1986.
'Not appreciated'
Mr Darling said the correct information had initially been published, but only for a year after the change was announced.
And between 1987 and 1996 the information was wrong - which Mr Darling said was "inexcusable".
He said the social security department had "not appreciated" the implications of the error.
Mr Darling blamed the last Tory government for the mistake and said the National Audit Office report and another from parliamentary ombudsman Michael Buckley on the affair provided "a damning indictment of what happened".
He said he would be setting up a special unit to consider claims along with a helpline and a campaign to raise awareness of the situation.
External audits
He said there had been "no clear line of accountability in the department for ensuring the policy changes were properly implemented".
And he said this highlighted a problem running throughout the department: "It was not focused on the people it was meant to serve."
Mr Darling said the policy and operation of pension policy was to be brought together, while Benefits Agency leaflets would now be externally audited by the independent Social Security Advisory Committee.
Mr Darling said: "We are making sure that people do not lose out because they got the wrong information.
"The last Conservative government has to take the responsibility for this mess and I will take the responsibility for clearing it up."
In his report, parliamentary ombudsman Mr Buckley said the department for social security had been guilty of "maladministration".
And the head of the National Audit Office, Sir John Bourn, said the DSS had failed to pick up the warning signs, even when the matter was referred to Parliament in 1995 and began cropping up in letters from MPs in 1997.
He said: "These were serious lapses in the standards of public administration and must not be repeated."
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