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Government urged to bring forward plans for WASPI compensation

Government urged to bring forward plans for WASPI compensation
Paloma Kubiak
Written By:
Paloma Kubiak
Posted:
16/05/2024
Updated:
16/05/2024

The Work and Pensions Committee has called on the Government to bring forward proposals for a compensation scheme for WASPI members before the summer recess.

The committee said it has been focusing on “what a remedy might look like” for women born in the 1950s affected by the Department for Work and Pensions’ (DWP’s) failure in communicating the increase in the state pension age from 1995 onwards.

For many, they were unaware the age would rise from 60 to 66, meaning they were unable to make an informed decision on their financial plan for retirement.

After a decade of campaigning to seek justice for those affected, Women Against State Pension Inequality (WASPI) were finally vindicated in March 2024.

The Parliamentary and Health Service Ombudsman’s (PHSO’s) final report, almost three years after its first, said Parliament now needs to “act swiftly” to reimburse the women affected.

With an estimated three million women born in the 1950s, but with one dying every 13 minutes, the PHSO called for Parliament to look into the findings and put things right, as “complainants should not have to wait and see whether DWP will take action to rectify its failings.”

Redress remedy and rates

Back in March, the PHSO said that compensation for maladministration should ideally reflect each person’s individual case, but acknowledged this would be difficult where millions of people are affected.

So, a flat rate in the range of £1,000-2,950 was suggested (‘level 4’ on the standard scale of compensation for ‘distress and inconvenience’).

The PHSO said compensating all women born in the 1950s at the highest range would involve spending around £3.5bn-10.5bn of public funds, although not everyone will be affected.

Now, the committee has suggested a way of compensating women based on the feedback received.

A rules-based system would allow payments to be adjusted within a range (based on the PHSO’s severity of injustice scale) to reflect the extent of change in the individual’s state pension age and the notice of the change that the individual received.

Essentially, this would mean the less notice you had of the change and the bigger the change in your SPA, the higher the payment you would receive.

“While not perfect, the advantages of such a system are that it would be: quick to administer; applying known data to a formula to determine the amount due; and relatively inexpensive (compared to a more bespoke system).

Beyond this, there should be some flexibility for individuals to make the case, after they have received the payment using the rules-based system we have outlined, that they experienced direct financial loss, and that they are therefore due a higher level of compensation,” the committee wrote.

Stephen Timms MP, chair of the Work and Pensions Committee, wrote in the letter to Mel Stride MP, secretary of state for work and pensions:

“Implementing a remedy will need parliamentary time, financial resources, and the data and technical systems only available to your department. It cannot happen without Government support.

“We would ask you to bring forward proposals for a remedy by the summer recess.”