The Department for Work and Pensions (DWP) has not put enough funds aside to cover the cost should the High Court find against it in the state pension age judicial review, according to the Office for Budget Responsibility (OBR).
Last month, Backto60 took the government to the High Court for a judicial review into the way the retirement age was raised.
Two claimants - Julie Delve, 61, and Karen Glynn, 62 - argued that raising their pension age "unlawfully discriminated against them on the grounds of age, sex, and age and sex combined". A judgement has been reserved.
The dispute came after plans to increase the state pension age were first announced in the Pension Act 1995 but these changes were accelerated as part of the Pension Act 2011.
Campaign groups The Women Against State Pension Inequality and Backto60 have claimed these changes were implemented unfairly, with little or no personal notice.
The groups, which are calling for compensation for those affected, have also claimed that changes were implemented faster than promised with the 2011 Pension Act and left women with no time to make alternative plans, leading to devastating consequences.
According to a report from the OBR, published yesterday (July 19), the DWP’s latest accounts mentioned the state pension age judicial review “in respect of complaints it receives as a result of the continuing campaign, but not any associated contingent liability should the judicial review ruling find against the government”.
Instead the DWP made a general statement that “the department has other ongoing legal cases that are not being disclosed as either contingent liabilities or remote contingent liabilities as any disclosure could prejudice the department’s position”.
Its accounts showed a contingent liability of £82m in respect of ongoing cases, which could go to claimants in the form of payouts if DWP loses its cases in the High Court.
However, the OBR stated this overall figure “clearly does not” include the recent judicial review.
It has warned that future legal costs presented a “fiscal risk” to the DWP.
The OBR had previously pointed out that DWP’s departmental accounts did not report the expected or potential cost of current or anticipated legal challenges, in contrast to HM Revenue & Custom’s treatment of tax disputes.
While the DWP has made a “general provision" of £390m for future costs in its annual accounts for 2018-19, only £82m has been listed as a possible liability.
The OBR said: "The cost of future legal cases could be greater than we implicitly assume.
"It will almost certainly be higher than the £82m in DWP’s accounts."
The DWP declined to comment.
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