16/12/2008

Pensioners Face Cuts To Repay Overpayments

UK Chancellor Alistair Darling has said money that has been overpaid to civilian and military pensioners across the UK need not be repaid.

However, the net result of the national financial blunder - first uncovered in Northern Ireland - is that thousands still face having their pensions 'cut' from April next year to make up at least some of the overpayments.

The issue was raised in the House of Commons by Liberal Democrat Treasury spokesman, Vince Cable, who was informed about the problem 10 days ago by a BBC Radio Ulster journalist in Northern Ireland.

It transpires that huge numbers of ex-military personnel and NHS staff are caught up in the chaos, which is thought to date back years and while the Government has already made clear it will not seek to "claw back" the cash immediately, Alistair Darling said the individuals would be forced to accept lower payments in future - sparking fears that many could be left struggling to make ends meet.

The problem could be made worse because recent heavy falls on the stock market and sharp reductions in interest rates have cut pensioners' income from savings.

Dr Cable said that he was informed about the problem by a BBC Radio Ulster journalist who highlighted how a firm called Xafinity Paymaster had overpaid public sector pensions to former servicemen and health service staff "for decades".

Dr Cable revealed that he raised the matter with Cabinet Secretary Sir Gus O'Donnell "several days ago", who confirmed the difficulty and asked for time to contact pensioners and tell them what had happened.

Dr Cable asked the Chancellor: "What are the steps that are going to be taken to retrieve the overpayments - which I understand in some cases is going back decades and are potentially enormous?

"I hope none of us can face the possibility of large numbers of ex-servicemen suddenly being faced with bailiffs turning up and asking them to repay overpayments."

Mr Darling responded that repayments were "not going to happen".

But he added: "It will be necessary to adjust what's paid for the future. It does need to be put right from next year."

Xafinity is believed to distribute 5% of public sector pensions, but it is not yet clear how much has been overpaid or what geographical areas are involved.

(BMcC)

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