Widowed people who inherited pensions could have lost out on Jobseeker’s Allowance

Inherited pensions: Widows and widowers who tried to claim JSA between spring 2020 and autumn 2022 may be owed money

Widowed people with an inherited pension who tried to claim Jobseeker’s Allowance during the pandemic could be owed up to £2,000 due to a Government blunder.

The Department for Work and Pensions is reviewing claims made from 19 March 2020 to 19 November 2022, and urging people to come forward so it can correct an error that could affect thousands of widows and widowers.

‘During that time, we may have treated income from a pension inherited from someone who has died the same as income from other pensions,’ says the DWP, which is contacting people directly about the issue.

It added: ‘Income from other pensions can affect how much New Style JSA you get. Income from pensions inherited from someone who has died does not affect New Style JSA claims.’

New style JSA is a ‘contributory’ benefit that you only get if you paid enough National Insurance, usually in the two full tax years before the year you make a claim.

You only get it for six months, and any income from it is taken into account if you also qualify for Universal Credit. The amount would therefore be deducted from your UC payments.

The people most likely to be affected by the error in assessing people for JSA are widows and widowers – whose number increased more than usual during the pandemic – who do not get UC.

They could have missed out on up to 26 weeks of JSA at £74.70 a week, the rate in 2021/22, or just under £2,000.

However, the first £50 per week of occupational pension income is ignored when JSA is assessed, so you would have get more than this in inherited pension to claim. 

Steve Webb, former Pensions Minister and now a partner at LCP, says: ‘People who are unemployed and claim Jobseeker’s Allowance can usually get six months of benefit provided they have made enough contributions.

‘If they have a significant company pension this can reduce or eliminate their benefit, but this only counts if it is their own pension and not one inherited from a late spouse or partner.

‘In this case DWP has wrongly been penalising people for inherited pensions and this could have cost some people up to around £2,000.’

Webb, who is This is Money’s pensions columnist, adds: ‘It is well worth anyone who made a claim and was turned down and who was receiving an inherited pension at the time to make inquiries to see if they are owed any money.’

Were you affected? Here’s what to do

The DWP is sending text messages or letters to anyone who might be affected, and has set up an information page, New Style Jobseeker’s Allowance: review of claims with an inherited pension

It says you could be owed some money if all the following apply:

– You made a claim for New Style JSA between 19 March 2020 and 19 November 2022

– You said you had income from a pension

– You had income from a pension inherited from someone who has died.

In this case, you can write to the following address (and you don’t need to use a stamp): Benefit Centre, Freepost DWP BC 38.

The DWP asks that you include the following:

– Your National Insurance number

– Copies of your pension statements showing the pension is inherited and the amounts of pension paid for the dates of your New Style JSA claim

– The reference PAN PEN

– Your bank, building society or credit union account details, if they have changed since you claimed New Style JSA.

The DWP will respond to your enquiry, and if you are owed money it will be paid direct into your account.

This post first appeared on Dailymail.co.uk