Principal Civil Service Pension Scheme · CAS-76331-X8L4

CAS-76331-X8L4

Ombudsman’s Determination Applicant Mrs S

Scheme Principal Civil Service Pension Scheme (the Scheme)

Respondents MyCSP (the Scheme Administrator)

Cabinet Office (the Scheme Manager)

Outcome

Complaint summary

Background information, including submissions from the parties

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19.1. MyCSP had acted “passively aggressive” in its dealings with her.

19.2. An explanation should be given for the June 2020 payment.

19.3. Her IB award was erroneously taxed in 2014. 3 CAS-76331-X8L4 19.4. Her 2019/20 P60 was incorrect.

19.5. An apology and compensation for the distress and inconvenience should be offered.

19.6. Separate annual statements for the IB award and the Pension should be provided.

19.7. Financial compensation of £100 per month backdated for the “mental distress and being unable to carry on with life”.

19.8. A payment of £35 should be paid to her representative.

19.9. Compensation for use of electricity, computer equipment, printing paper, ink and telephone calls.

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Adjudicator’s Opinion

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The Cabinet Office and MyCSP agreed with the Opinion and made no further comments. Mrs S was provided with an extension of time to provide further comments to the Opinion.

Mrs S provided further comments which do not change the outcome. I note the additional points raised by Mrs S which have been summarised below.

Mrs S’ additional comments

Part of her IDRP complaint had been upheld because MyCSP had acknowledged that the letter issued to her on 23 October 2019 did not provide an in-depth explanation for the reduced pension or overpayment. This was likely because the GMP reconciliation exercise had affected approximately 36,000 members of the Civil Service Pension Scheme and so it was not possible to provide such in depth information on a bespoke basis. The Opinion by the Adjudicator was overturning the decision by MYCSP which was in her favour, and this was incorrect.

She had notified DWP of the overpayment as soon as she realised, she was incorrectly receiving too much DWP Incapacity Benefit. She was then correctly paid payments under the Civil Service Injury Benefits Scheme (CSIBS) and made a full refund of the amount of Incapacity Benefit overpaid to the DWP. Therefore, in effect there was no actual overpayment once this transaction had been completed and 8 CAS-76331-X8L4 there was nothing to write off. Documentation to confirm this was provided. This included correspondence requesting that the person who handled the original case looked into it again when the GMP was said incorrectly to be the cause of the overpayment.

In December 2020, she had written to the case handler who had assisted her with the IB tax arrears in 2014. She explained that the issue dated back to 2014 when she was paid £442.65 IB arrears. She had then had two large amounts of Income tax taken as a result of the payment showing as pension and not non-taxable IB. In the end, it had resulted in her being given payments to cover the loss of tax, but she had been told that any excess would be written off due to the problems that had resulted from this error. In that correspondence, she said that the first large overpayment was stated to be in the year 2013/14 when reached state pension age in January 2014 and it was somewhere around that time that the IB arrears were incorrectly allocated as a Pension.

The PI had nothing to do with payments from DWP. HMRC had constantly informed Mrs S that her GMP was correct and no changes had been notified when the reconciliation was submitted. She had written to them and telephoned them, and they had not been informed of any discrepancies.

Any error was not the fault of Mrs S and that the exact amount of any error, if it can be said to exist, could not be calculated as it had been said that the transfer of data between government departments had historically fallen and MyCSP did not receive or had received the data incorrectly. This did not inspire confidence that any conclusion drawn from the lack of data or incorrect data was correct.

The Opinion had referred to an overpayment of approximately £750, and this was a recognition that a correct figure could not be given and puts in doubt that any overpayment occurred. MyCSP have said that they paid PI incorrectly on the whole Pension, but they could not be sure from their reconciliation that data was either not received or was incorrect.

The issue around the IB award was brought up as soon as the problem could have been, and therefore this should be considered at the next stage of the complaint. Mrs S did raise the overpayment as soon as she could have and made full repayment of the same and this was not considered out of time, and she was not allowed to keep it. It seemed that double standards have been applied by not looking at the first complaint due to it going too far back.

The Adjudicator’s view that the explanation in how the error occurred was disputed. MyCSP could only confirm with certainty that they were not provided with correct information. Mrs S had provided figures about the matter which differed to those provided by MyCSP which were still not proven and were unlikely to be so.

Mrs S was all this time suffering from work related stress and the additional stress then and now of still not being certain if she is receiving correct payments. The original decision partly upheld the complaint and allowed her an award of £9.60 for 9 CAS-76331-X8L4 the stress caused. This was never paid and it was disputed this was adequate recompense for errors going back to 2014. Being allowed to keep an overpayment of approximately £750, which Mrs S has, she said, proven did not exist was not sufficient compensation for the stress and inconvenience caused and which was still ongoing.

The tables provided show PI but there was nothing to show what CSIB was paid and should have been paid. As the pension was taxable, but injury benefit was not, the only part of the payment incorrectly paid would be the injury benefit when paying the two together. If an overpayment had occurred there would also be an element of overpaid tax.

Whilst the breakdown of Pension had been provided in tables she questioned why MyCSP avoided to provide a breakdown of CSIBs payments. She had submitted evidence that a one off CSIBs payment was incorrected allocated as a Pension, and it then suffered tax. The CSIBs was not taxable. Mrs S had requested that they should raise a P35 and a minus P60 and move the money to the correct place, but they had refused and said that they would make a payment into the Pension for the amount of the extra tax that had been deducted.

The Adjudicator asked the Cabinet Office why £9.60 compensation previously offered to Mrs S had not been paid to her. This was therefore reissued to Mrs S and Mrs S was advised of the same. A document of all payments paid to Mrs S was shared with her.

In response, Mrs S queried why the Cabinet Office was bringing the £9.60 now. She also said that she had written to the Scheme Compliance Unit (SCU) and the Head Administrator back in January 2021 about this issue asking for confirmation that they had followed the PASA GMP Reconciliation. This information was available as part of her evidence on file. She again referred to the letter from the Pension Administrator’s case handler who Mrs S had been in contact with regarding the non-taxable IB award and who she said had handled the tax refund but had left the payment as pension pay. The evidence of this was also on file. She said that the only payment voucher for £442.65 listed on the Cabinet Office document of list of payments was Pension taxable. She required a copy of that receipt as it was posted on the system and what it was in respect of. She said if the Cabinet Office claimed this it to be a pension, she wanted full information as to why her pension was being paid in bits and pieces. However, the other side did not dispute that the £442.65 was incorrectly allocated as pension in 2014 and that subsequently Mrs S received tax arrears for this which she also did not dispute.

Mrs S suggested forwarding a copy of the PCS Union Pension Provision Update about the re-calculation of pensions following the rectification of GMP and an Internal Framework Review. She highlighted that it had been agreed to waive all overpayments identified by the GMP rectification, so she queried if GMP reconciliation was a different action being used to punish her for their incompetence.

10 CAS-76331-X8L4 She queried how this incompetence, lack of accuracy and knowledge was not maladministration which had caused her distress and anxiety.

The Adjudicator replied and clarified that the Cabinet Office had sent the £10 compensation as they had queried this with them following Mrs S’ comments. The Adjudicator also advised they had shared with Mrs S the email exchanges between the Adjudicator and the Cabinet Office as well as the payment breakdowns as requested. They also advised that they had seen the letters Mrs S was referring to in relation to the issue surrounding the IB award. The Adjudicator explained that as requested previously the matter was being referred to me for Determination.

Ombudsman’s decision The central dispute to Mrs S’ complaint was whether an overpayment of benefits occurred in relation to the Pension, and the reasons for that overpayment.

The tables provided by the Cabinet Office in Appendix A showed the rate at which MyCSP paid Mrs S’ pension between 2014 and 2020, and the changes that followed after the GMP reconciliation exercise. The evidence in Table A showed that initially Mrs S’ Pension was not split correctly in pre-88, post-88 and non-GMP (excess) figures. The evidence thus shows that any PI between 2014 and 2020 was incorrectly applied to the whole of Mrs S’ Pension rather than to the Pension in payment which attracted the PI from the Scheme (the post-88GMP and non GMP). MyCSP explained that the transfer of data between HMRC and MyCSP was not kept up and MyCSP had not received the GMP data. Therefore, MyCSP was applying full increases to the whole of the pension.

Mrs S argued that incorrectly applying the PI to the pre-88GMP would not result in such large overpayments. However, the tables in Appendix A showed that the PI was incorrectly applied to the whole pension (pre-88, post88 and non-GMP) and not just the pre-88GMP. There was one anomaly in 2014, a larger overpayment. The Cabinet Office confirmed that for that year only it seemed that Mrs S had received the PI twice. Mrs S disputed this and said this had occurred because of the £442.65 IB award which was incorrectly allocated as pension pay in 2014. She referred to the letters from the respondents that confirmed that £442.65 IB award in 2014 was incorrectly allocated as pension and taxed.

The evidence Mrs S referred to, including the letters that confirmed that the £442.65 IB award was incorrectly paid as a pension and taxed in 2014 and her emails to the SCU FAO Head Pensions Administrator back in January 2021 were considered alongside her other submissions. Mrs S suggested forwarding a copy of the PCS Union Pension Provision Update about the re-calculation of pensions following the rectification of GMP and an Internal Framework Review. This was not necessary as would not change the outcome of the complaint. More importantly, I accept that the error in relation to the IB award in 2014 occurred. This was not in dispute. This was accepted by the Cabinet Office and the evidence submitted by Mrs S confirmed that.

11 CAS-76331-X8L4 However, the issue was remedied in the same year. As confirmed by MyCSP, the IB award was also not subject to the GMP reconciliation exercise. I am tasked with deciding a dispute of fact: whether the incorrect allocation of the IB award in 2014 was the reason for the pension overpayment as claimed by Mrs S. I have found that this was not the reason for the Pension overpayment for reasons I have given.

As a starting point, it is important to note that Mrs S did not dispute the starting Pension figures as quoted by the Cabinet Office following the reconciliation exercise and the split. On the contrary, on the application form she said “MYCSP constantly repeating the same figures, with tables that all show the correct starting figure of Pre 88 GMP £1315.08 , Post GMP £1636.68. These are the figures held and advised by HMRC who have categorically stated that they have NEVER been advised of any discrepancies.” If these figures were the correct starting figures as advised by HMRC and used as part of the reconciliation exercise, then one could work out how much pension, if any, had been overpaid and the actual entitlement. Therefore, even if the £442.65 was incorrectly allocated as pension pay in 2014, this should not impact the actual entitlement which is calculated, as Mrs S said, on the figures provided by HMRC and any overpayment was written off.

As evidenced in Table A in Appendix A below, the overpayment arose because the Pension was not split correctly in GMP and non-GMP and this continued until 2019/2020. As explained, Mrs S believed that the IB award of £442.65 which was incorrectly allocated as Pension in 2014 and incorrectly taxed as the reason for the overpayment. This was not supported by the evidence in the tables which clearly showed the overpayment did not occur once in 2014 but continued over the years. This was due to the Pension not being split correctly in pre-88, post88 and non-GMP.

In the light of the foregoing, I am satisfied that when the Pension record was amended to reflect the correct split in pre-88GMP, post-88GMP and non-GMP (excess), MyCSP was able to work out Mrs S’ actual entitlement to compare this to the actual payments paid. Table F in Appendix A showed the actual Pension that was due, and the actual Pension paid, which was sufficient to evidence the overpayment. I therefore find that the evidence showed that the overpayment in relation to the Pension occurred between 2014/2015 and 2019/2020. From the evidence, the overpayment occurred because the Cabinet Office had not properly split and categorised the Pension in GMP and non GMP figures. In any event, since the overpayment in relation to the Pension was written off, Mrs S suffered no financial detriment (indeed, she received a windfall). In respect to the future Pension, I find that the Respondent was correct to adjust the Pension to the correct entitlement.

The issue in relation to the IB award and the tax arrears in relation to this from 2014 were, in 2022, found to be out of time under the Personal and Occupational Pension Schemes (Pension Ombudsman) Regulations 1996 (SI 1996 No. 2475), (the Regulations). Mrs S had asked for this to be reviewed by me, but it would in any event not change my view, for reasons I have given above. Mrs S kept referring to the evidence of the £442.65 IB award incorrectly paid as pension in 2014, but that did not change the outcome, nor did the Cabinet Office dispute that this error occurred. As 12 CAS-76331-X8L4 mentioned, remedial actions were taken around the same time, and Mrs S did not dispute that the arrears were paid to her.

Mrs S further said that her Pension did not match her P60 and so she was unsure if she was in receipt of the correct amount. MyCSP had provided Mrs S with breakdown of pension payments made to her for 2019/2020 on 10 June 2020 and the Cabinet Office was satisfied these figures tallied up with the figure Mrs S had given of £14,910.34 as showing on her P60. On the application form to TPO Mrs S said “MyCSP are stating a different annual pay for 20/21 tax year (a letter 29 June 2021 £15164.80) to that stated by the Cabinet office (£14944.89) in their final decision item 11, and my P60, (£15118.88).” The letter she was referring to from MyCSP dated 29 June 2021 confirmed that the Pension for 2021 was £15,164.80. But the letter from the Cabinet Office she referred to provides the Pension as understood then in April 2020 (following the October 2019 reconciliation changes but not before the June 2020 changes). The June 2020 revision meant that further PI was applied to Mrs S’ benefits in April 2020, meaning her Pension in payment for 2020/2021 was then paid at an annual rate of £15,095.89. Table D in the Appendix confirmed the increases applied to the Pension in 2020 following the changes (see in the Appendix). The figure in Table D which was provided to Mrs S in December 2020 also matched the figure quoted by MyCSP for 2020 in the 29 June 2021 letter. This letter also explained that the annual amount Mrs S was quoted each year is a rate of pension payable and not a total of what she would receive the following tax year. PI is applied on the first Monday of each tax year and therefore her Annual Rate does not always fall in line with the start of the tax year.

For the reasons I have given above, I have found that the overpayment of benefits in relation to the Pension occurred due to the Respondent not having categorised Mrs S’ pension properly and thus not paying her the correct PI. I have accepted that the error surrounding the £442.65 IB award occurred, but I have found this was a separate matter and remedied and I accept MyCSP’s confirmation that the IB award was not impacted by the GMP reconciliation exercise.

Dominic Harris Pensions Ombudsman 21 January 2026

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Appendix A Breakdown of pension payment received for 2019/20

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Table A, B and C – extract from IDR1 determination 25 September 2020

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Table D Increase applied from April 2020

2020/21 1.7 £1,315.08 £1,843.18 £11,937.63 £15,095.89

Table E Annual Rate of Civil Service Pension

Pension PI Pre88 Post88 Non-GMP NI Mod Total Start Date (%) GMP GMP (PI*) (PI**) Deduction Annual Civil (no PI) Service pension

14/06/2011 - £0.00 £0.00 £0.00 - £12,609.81 09/04/2012 5.2 £0.00 £0.00 £0.00 - £13,265.52 08/04/2013 2.2 £0.00 £0.00 £0.00 - £13,557.36 06/01/2014 - £0.00 £0.00 £0.00 -£3.32 £13,554.04 06/01/2014 - £1,315.08 £1,636.96 £10,602.00 - £13,554.04 07/04/2014 2.7 £1,315.08 £1,681.16 £10,888.25 - £13,884.49 06/04/2015 1.2 £1,315.08 £1,701.33 £11,018.91 - £14,035.32 11/04/2016 0 £1,315.08 £1,701.33 £11,018.91 - £14,035.32 10/04/2017 1 £1,315.08 £1,718.35 £11,129.10 - £14,162.53 09/04/2018 3 £1,315.08 £1,769.90 £11,462.98 - £14,547.96 08/04/2019 2.4 £1,315.08 £1,812.37 £11,738.09 - £14,865.54 06/04/2020 1.7 £1,315.08 £1,843.18 £11,937.63 - £15,095.89

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