Of 400,000 military retirees, 6,000 have so far been identified as having overpayments. The majority have written off the sums, but the grand total affected by cuts could potentially be in the thousands.
Hundreds of military veteran’s pensions are cut by as much as £ 600 a year due to a computer glitch that resulted in years of overpayment. I can betray.
As the nation prepares for Memorial Sunday, veterans have received letters from Equiniti Paymaster, the company that manages the armed forces pension system on behalf of the government, informing them of cuts to their monthly payments.
The cut follows an investigation by Her Majesty’s Treasury and Customs Service (HMRC) into computer glitches that the Tax Service now claims have resulted in decades of overpayments to veterans in some cases.
Of 400,000 military retirees, 6,000 have so far been identified as having overpayments.
I the vast majority of total payments uncovered so far have been said to have written off their overpayments, but at least several hundred face cuts of more than £ 500 a year – while others face cuts of lesser magnitudes.
The total number of retirees affected could potentially reach thousands.
The military pensions are calculated at 50% of the base salary after 20 years of service, and 75% for 30 years of service.
A letter from Equiniti to military veterans, seen by I, explains, “The Armed Forces Pension Scheme (AFPS) recently participated in an exercise with the HMRC along with many other retirement plans. This exercise was conducted to review and reconcile pension data between AFPS and HMRC and is known as “reconciliation”.
“We need to change your pension because the value of the guaranteed minimum pension or the contracted data from AFPS and HMRC were incorrect.
“We are sorry to have to inform you that a change in your Bundeswehr pension is necessary due to the reconciliation exercise.”
Equiniti is an outsourcing company focused on financial and administrative services including managing pensions in the public and private sectors.
The Equiniti letter also informs veterans that they have no appeal against the decision to cut their pension payments.
Opposition MPs rounded out HMRC, claiming that words from Boris Johnson about the “sacrifice and service” of veterans this weekend will “sound hollow” when the nation unites in memory tomorrow [on Sunday].
Labor Party’s Shadow Veterans Minister Stephanie Peacock said I: “Many former emergency services are already struggling with the cost of living crisis. Now they will lose even more through sheer incompetence. “
Carol Monaghan, SNP shadow spokesperson for the armed forces and veterans, added: “During this commemorative time we should honor past and current staff for their commitment to our peace and security, the decision to cut pension payments by thousands. “By military veterans is both offensive and unsettling.
“HMRC needs to do the right thing and reverse this impending pension cut with immediate effect.”
Neil Coyle, a Labor member of the Special Committee on Work and Pensions, said: “This is a slap in the face for veterans across the UK.
“I hope that the attempt to turn down appeals will be challenged and I urge ministers to step in to prevent the veterans of our armed forces from being abandoned.”
An Equiniti spokeswoman said, “A review of the Defense Business Services and HMRC records resulted in a reconciliation exercise. This exercise was government promoted and has an impact on all contracted pension systems in the UK. “
A Defense Department spokeswoman added: “The majority of the identified overpayments have been written off with no further action, but we are aware of the difficult situation this can cause for those still affected and are working hard to provide full support through Veterans UK since Payments made are adjusted.
“A recent comparison between HMRC’s records and the pension systems showed a number of underpayments or overpayments. Therefore, we are taking appropriate steps to ensure that members receive their eligible benefits, including adjustments to future pension payments. “
An HMRC spokesperson said: “It is the responsibility of pension schemes and employers to keep records of their membership in pension schemes and manage the pensions of their members or employees.
“HMRC’s records of early retirement membership times were maintained using information provided by pension schemes and employers.
“In anticipation of the end of the contract in 2016, HMRC has established a voluntary service, the Scheme Reconciliation Service, to help pension funds confirm the accuracy of their records by comparing the system records with the HMRC records.”