DWP confirms no State Pension age compensation for millions of WASPI women

Work and Pensions Secretary Liz Kendall has announced there will be no compensation scheme for an estimated 3.5 million 1950s-born women affected by changes to their State Pension age. Making the statement to MPs in Parliament on Tuesday, Ms Kendall explained that following a thorough review by the Department for Work and Pensions (DWP) of the Parliamentary and Health Service Ombudsman’s (PHSO) final report, published on March 21, she apologised on behalf of the UK Government to all women impacted by changes to their retirement age.

Ms Kendall told the Commons: “I know this is an issue of huge concern to many women, which has spanned multiple Parliaments. My Hon Friend, the Pensions Minister and I have given the Ombudsman’s report serious consideration and looked in detail at the findings, and information and advice provided by the Department, which was not available to us before coming into Government.”

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She explained that the PHSO looked at six cases and found that the DWP provided “adequate and accurate information on changes to the State Pension age between 1995 and 2004” but added that “decisions made between 2005 and 2007 led to a 28-month delay in sending out letters to women born in the 1950s.”

Ms Kendall admitted there was maladministration by the DWP. She said: “We accept that the 28-month delay in sending out letters was maladministration.

“And on behalf of the Government, I apologise. “

She continued: “We also agree with the Ombudsman’s findings that the women suffered no direct financial loss because of this maladministration. However, we do not agree with the Ombudsman’s approach to injustice or remedy. And I want to spell out why.

“First, the report does not properly take into account research showing there was actually considerable awareness that the State Pension age was increasing. It references research from 2004 showing 43 per cent of women aged over 16 were aware of their State Pension age, but it doesn’t sufficiently recognise evidence from the same research that 73 per cent of women aged 45-54 - the very group that covers women born in the 1950s - were aware that the State Pension age was increasing, or research from 2006 that 90 per cent of women aged 45-54 were aware that the State Pension age was increasing.”

Compensation

Ms Kendall highlighted that “most women knew the State Pension age was increasing” and that letters issued, or not issued, “aren’t as significant as the Ombudsman says”.

She added: “As well as other reasons, have informed our conclusion that there should be no scheme of financial compensation to 1950s born women in response to the Ombudsman’s report.”

The PHSO’s final report stated that “Parliament must urgently identify a mechanism for providing that appropriate remedy” and recommended compensation equivalent to level four on its banding scale, which is worth between £1,000 and £2,950.

Ms Kendall continued: “The Ombudsman says that, as a matter of principle, redress and compensation should normally reflect individual impact. However, the report itself acknowledges that assessing the individual circumstances of 3.5 million women born in the 1950s would have a significant cost and administrative burden.

“It has taken the Ombudsman nearly six years to investigate the circumstances of six sample complaints.

“For the DWP to set up a scheme and invite 3.5 million women to set out their detailed personal circumstances would take thousands of staff years to process. Even if there was a scheme where women could self-certify that they weren’t aware of changes to their State Pension age, and that they have suffered injustice as a result, it would be impossible to verify the information provided.”

Ms Kendall also addressed proposals for a ‘flat rate’ compensation scheme. She said: “The alternative put forward in the report is for a flat rate compensation scheme, at level 4 of the Ombudsman’s injustice scale.

“This would provide £1,000 to £2,950 per person, at a total cost between £3.5 and £10.5 billion.

“Given the great majority of women knew that the State Pension Age was increasing, the Government does not believe paying a flat rate to all women - at a cost of up to £10.5 billion - would be a fair or proportionate use of taxpayers’ money.”

Commenting on the announcement, Angela Madden, Chair of Women Against State Pension Inequality campaign (WASPI) said: “The Government has today made an unprecedented political choice to ignore the clear recommendations of an independent watchdog which ordered ministers urgently to compensate WASPI women nine months ago.

“This is a bizarre and totally unjustified move which will leave everyone asking what the point of an ombudsman is if ministers can simply ignore their decisions. It feels like a decision that would make the likes of Boris Johnson and Donald Trump blush.

“The idea that an ‘action plan’ to avoid such mistakes in future should be the result of a six-year Ombudsman’s investigation is an insult both to the women and to the PHSO process.

“An overwhelming majority of MPs back WASPI’s calls for fair compensation and all options remain on the table. Parliament must now seek an alternative mechanism to force this issue on to the order paper so justice can be done.”

The announcement was met with backlash from several opposition MPs with shouts of “shame” when Ms Kendall made the announcement.

Labour MP Brian Leishman said he was “appalled” at the decision to not provide financial compensation to the Waspi women. The MP for Alloa and Grangemouth told the Commons: “Firstly I’d like to say I’m appalled at this announcement and I have campaigned with WASPIi women, as have many parliamentary colleagues, and this is an incredible let down.

“WASPI women, in my opinion, certainly do not need words of disappointment and they certainly do not need hollow statements. What they need is justice. Does the Secretary of State not agree with that?”

Ms Kendall said: “I believe that this is a difficult decision but the right and fair one.”

She offered to meet Mr Leishman to discuss the matter further.

Independent MP Rebecca Long Bailey, who co-chairs the all-party parliamentary group (APPG) on State Pension Inequality for Women, said the Government’s apology was “not enough” for WASPI women.

Ms Long Bailey said the APPG found “huge numbers” of women suffered “significant financial hardship”, telling the Commons “(Ms Kendall) must realise that an apology is welcome but it’s not enough for them and, frankly, it’s unprecedented for a government to agree with the findings of an ombudsman on the one hand but to refuse to initiate redress when clear injustice has occurred.

“So to those women who have lost everything, what will (Ms Kendall) say to reassure them today?"

Ms Kendall replied: “I understand the concerns (Ms Long-Bailey) raises but I just reiterate the finding from the ombudsman’s report that there was no direct financial loss and we agree that those letters should have been sent out earlier, we will learn all the lessons in order to put that right.”

Liberal Democrat MP Wendy Chamberlain (North East Fife) said: “The Secretary of State says 1950s women will be disappointed. I think that is a gross understatement given that this Government is setting a precedent by ignoring an independent resolution process.”

Sir Steve Webb, a former Liberal Democrat pensions minister who is now a partner at pension consultants LCP (Lane Clark & Peacock) said: “The Government’s handling of this issue sets an extremely worrying precedent. If it is acceptable for a department to completely reject the findings of a report by the independent Parliamentary Ombudsman, this strikes a blow at the heart of the whole process.

“There is a risk that governments will now feel emboldened to ‘pick and choose’ when faced with a critical Ombudsman report, effectively setting themselves up as judge and jury. Even if the Government felt it could not afford to implement the recommendations in full, there were many options which would have offered some redress to those most affected.

“Outright rejection of the Ombudsman’s report raises much wider issues than compensation over pension age changes, and MPs should not take this decision lying down.”

Liberal Democrat work and pensions spokesman Steve Darling said: “Today is a day of shame for the Government. The new Government has turned its back on millions of pension-age women who were wronged through no fault of their own, ignoring the independent Ombudsman’s recommendations, and that is frankly disgraceful.”

You can read the full report from the DWP on the GOV.UK website here.