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| The Times, 11 March 2006 |
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| MINISTERS are preparing to write off almost all the £ 130 million paid in error to some of the poorest pensioners. |
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| They made clear last night that in most cases they would not be pursuing overpayments. |
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| The Times has learnt that fewer than one hundred letters have been sent to pensioners informing them that they have received too much. Sources say that many of this small number of letters tell the pensioners that even though an overpayment has been made, there will be no effort to reclaim the cash, either because it would cause hardship, or because it was a result of clerical error. In such circumstances the Government is obliged by law to forgo the cash. |
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| Figures obtained by the Conservatives this week showed that overpayment on means-tested pension credit and income support had trebled in the past three years to £ 130 million last year. |
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| The benefits are intended to boost the incomes of the least well-off pensioners. |
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| Those with a small occupational pension are entitled to the pension credit, while the poorest households get income support. Ministers feared a repeat of the scandal over tax credits were they to attempt to recover the money. There has been criticism of the aggressive "automatic clawback" by Revenue & Customs of overpayment from low-paid households. |
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| David Ruffley, the Conservative welfare spokesman, said that ministers had put out confusing messages on the overpayment of pensions and were "all over the shop - how can pensioners have any faith in what they say after this fiasco?" |
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| Next week Gordon Brown will face calls to compensate thousands who have lost occupational pensions. Ann Abraham, the Parliamentary Ombudsman, will report on whether the Government misled workers over the safety of final-salary schemes. As many as 85,000 people have lost their savings. The compensation bill could exceed £ 5 billion. The Chancellor and John Hutton, the Work and Pensions Secretary, are expected to challenge the report. |
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| About 15,000 of those who lost their final salary pensions are eligible for compensation under the Government's £ 400 million Financial Assistance Scheme. Officials have confirmed that, so far, only 15 people had received a payment. |
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