Under existing arrangements, where a claim to old age contributory pension, retirement pension, widow's or widower's contributory pension or orphan's contributory allowance is made late, arrears of up to 12 months are paid. This applies to any claims made after 1 January 1997. Under regulations which I made in 1998 additional arrears beyond 12 months are paid on a sliding scale.
For pension claims made prior to 1 January 1997, arrears of up to six months can be paid. I also made additional provision this year for payment of further arrears on a sliding scale at an estimated cost of £10 million. My Department has paid arrears in 1,887 such cases. Work on identifying additional cases which may be entitled to arrears payments is continuing.
Regardless of when late pension claims are made, there is provision to pay further arrears in certain cases, namely where the person is proven to have been incapable of claiming on time, where wrong information was given by the Department, force majeure or where the claimant is currently suffering financial hardship.
It is a long-standing requirement of our legislation that claims should be made within a certain time and that payment of arrears may be affected by failures in that regard. Similar provisions are a feature of the legislation of other countries. These restrictions are justified by the need to exercise supervision and control of claims and by the need to exercise sound financial management and control of public expenditure.
The changes which have been made in this year's budget and going back to 1997 represent a significant improvement in the position that has applied heretofore and strike a reasonable balance between the need for effective management of the system and for appropriate recognition to be given to cases of genuine hardship or difficulty. Pensioners with late claims now receive full arrears for a certain period of their claim plus a proportion of arrears over the remaining period of the late claim. Full arrears for the entire period of the claim may be made in certain circumstances.
The Ombudsman has taken a particular interest in this matter over a number of years and the provisions which we have made represent a full response to the issues raised by him. My Department will ensure that any outstanding cases where arrears may be due will be dealt with as quickly as possible.