Retired civil servants hit with pension repayment bills in the thousands
One ex-civil servant says his enquiries have gone unanswered after he received a bill for more than £8,000
Retired civil servants are being asked to repay up to thousands of pounds that they have been overpaid by the pensions administrator MyCSP, in some cases over several years, CSW has learned.
As many as 1,200 former civil servants may have been asked to pay money back after their pensions were revised by the administrator.
CSW has spoken to several former civil servants who have received letters from MyCSP demanding repayments years after retiring.
The Cabinet Office has confirmed that pensioners will be expected to pay back the extra cash. The revisions are separate from an error that came to light last year, when MyCSP found a Guaranteed Minimum Pension miscalculation had led to overpayments worth £22m. In that instance, MyCSP said thousands of people would have their pensions cut, but that it would not seek to reclaim cash they had already received.
Patricia Wilson, who retired from the Department for Work and Pensions in 2011, received a letter in April from MyCSP “out of the blue” with a demand for more than £3,000.
The letter, seen by CSW, said that Wilson had received £2,903.68 more than she was entitled to in pension payments, and £177.05 extra on her lump sum payment.
She was told to pay back the £3,080.73 by cheque or bank transfer, and that her annual pension of £9,402.35 would be reduced by £488.01.
“When you retired, we worked out your benefit entitlement using the information we held for you at that time. Since then, we have received further information from your employer that shows a decrease in your pensionable earnings,” the letter read.
Wilson said that in the eight years since she retired, “nobody let me know that I was receiving the wrong amount”.
“You would expect that any error would have been picked up long before now. It appears that the tax office sent data that they had collated to the pension office – and lo and behold, I received a letter 2019 asking for repayment.”
“I really can't pay this money back,” Wilson, who now works part-time at a low-wage retail job, added. “Paying back a sum like this would put me in hardship situation.”
Lynne Gates, who worked at DWP for 39 years, said the near-identical letter she received, demanding £731.89 in overpaid benefits, didn’t make it clear how the error arose and included no information on how to appeal the decision.
“The wording in this letter’s absolutely unreal,” she said. “It implied that it was my employers’ fault… my first thought was that my manager had done something wrong, because that was the impression that it gives.”
“I would certainly struggle to repay over £700 at the drop of a hat and am livid they have decided to ask people to repay it, without quoting any appeal rights.”
None of the letters CSW saw indicated how to challenge the decision. There was also no automatic option to pay the money back in instalments, although recipients were told repayment plans could be arranged “in some circumstances” if they submitted financial records.
“We will assess each case individually to understand whether a payment plan is appropriate. In particular, we will consider all instances of financial hardship and in these instances may request a statement of means form to be completed,” the letters said.
Pension payments can be subject to recalculation to ensure they are correct and are maintained in real terms once people have left the scheme, or that they meet GMP provisions. The letters seen by CSW did not explain how or why the recalculations were made, but according to a Cabinet Office spokesperson, the revisions arose after MyCSP reviewed 300,000 people’s pensions entitlements, of which 12,000 have been changed.
Of those 12,000, “over 90%” are seeing an increase in their pension as a result, they added – leaving up to 1,200 who face a cut and may also have to pay money back.
“We recognise the inconvenience this will cause some former employees but we are legally obliged to ensure pensioners are paid their agreed entitlement,” the spokesperson said, adding that the majority of overpayments were less than £1,000.
MyCSP is a part-private, part-employee owned firm spun out of government to administer pensions for around 1.5 million current and former civil servants and overseen by the Cabinet Office. Some of the repayment errors predate its establishment in 2012, before which the system was run centrally by government.
Gates, who took partial retirement in 2013 before stepping down entirely this March on health grounds, said the overpayments should be written off as an official error.
“I appreciate when a mistake’s been made it has to be rectified, I totally get that, but as for the overpayment, I don’t see why I should have to repay something that was beyond my control.”
Gates wrote to MyCSP to challenge the decision a month ago but has had no response.
Other pensioners CSW spoke to have also had little success challenging the decisions.
Daniel Kennedy, who was told his annual pension had been cut by £1,081.45 when he received an £8,316.22 bill in February, said he had been told, after referring his case to MyCSP’s investigations team, to expect a response within 10 working days.
Three months later, he is still waiting. He said he felt unable to follow up on his query in case it prompted the administrator to demand that he pay back the sum he owed immediately.
“The bottom line is that I don’t know if their ‘recalculations’ are correct or not without a full diagnosis of the figures involved – which I obviously don`t have,” Kennedy, who retired a year ago after a career in the RAF and the civil service, said.
“There is something obviously totally wrong with the civil service pension system… When I retired all the paperwork went through, I filled all the forms in that I was supposed to. It was all done in good faith and it’s their mistake.”
And when Andrew Miller – who received a demand for £684.34 14 years after retiring from a 38-year career in local and national government – contacted MyCSP for more information, he wasn’t told why he had been overpaid.
He asked to know why his case was being treated differently to those uncovered last year, but answers were not forthcoming. Instead, MyCSP’s internal disputes team simply told him that Managing Public Money guidance produced by the Treasury meant the administrator “must seek to recover overpaid money, irrespective of how it was overpaid”.
“Although every effort is made to ensure the correct benefits are paid if they were based on incorrect or inaccurate information, future benefits have to be amended and recovery sought for any overpayment,” the email said.
“Civil Service Pensions would never wish to place anyone in financial hardship,” it went on. Miller was invited to submit a statement of means to enable MyCSP to assess his financial position and ability to repay the sum, including evidence of any joint income and expenditure.
“I live with my wife, who has had cancer treatment for the last 18 months, and my 91-year-old mother. I have to budget accordingly based on what MyCSP have calculated my pension to be,” Miller told CSW.
“At the same time, they say that they will only consider my request for the overpayment being written off if I can provide details of my bank accounts and income to prove my inability to repay – in other words, prying into my private affairs.
“This is totally unfair. The error is theirs, so they should bear the cost, not the members.”
*Some names have been changed.
Are you affected by this issue? Have you received a letter reducing your pension? CSW wants to hear from you. Please email email@example.com
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