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Pension system faults resulted in millions receiving wrong amounts for decades

IT system deemed 'too complex' to fix by the DWP has been issuing wrong payments since the 90s

The sign of the Department for Work and Pensions (DWP) as seen on its building

Millions of people may have received the wrong pension due to an ongoing IT failure dating back to the 1990s.

The Department for Work and Pensions (DWP) says it is "investigating possible remedies", though the problem appears to have been largely ignored by successive governments, the BBC reports.

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The issue is centred around the Pension Strategy Computer System, which was first introduced in 1980. There is a section of the system known as the Graduated Retirement Benefit that is unable to be upgraded, with DWP officials deciding in 2002 that it would be too complex to fix.

However, twenty years later, the government is still yet to find a solution to the issue, which resulted in 23% of pensioners being underpaid, and 17% being overpaid, according to figures published last month seen by the BBC.

The DWP told IT Pro that 98% of these cases were either over or underpaid by 1p or 2p per week, over the course of two decades. The remaining 2% of cases are all below 10p.

The ageing computer system, which has been described by a number of MPs as "not fit for purpose", was due to shut down in 2020. It is still in use, however, supposedly on a temporary basis.

On a separate occasion, the National Audit Office said the system had led to 134,000 people who had claimed their state pension prior to April 2016 not receiving their full entitlement. Underpayments averaged over £8,000.

There have been similar issues with legacy systems in over departments, such as the Police National Computer, which is controlled by the Home Office.

The latest problem to be discovered seems to mainly affect widows, divorcees, and women who rely on their husband's pension contributions for some of their entitlement. Reimbursing those affected is expected to cost the government around £1.05 billion.

In a statement, the DWP said the errors were "decades-old" and that "successive governments" had failed to correct them.

"Our priority is ensuring every pensioner receives the financial support to which they are entitled and most Graduated Retirement Benefit awards are correct," a spokesperson told IT Pro.

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