Compensation
At a glance
If you suffer a clear and direct financial loss because of the age discrimination remedy, you may be able to claim compensation. Some compensation is paid automatically (such as refunds of overpaid contributions or tax relief). Other losses - like accountancy, financial advice, legal costs, or specific tax losses - require you to submit a claim with evidence. You should normally submit claims within six months of making your remedy choice, using the official compensation claim form.
An explanation
What is compensation?
Compensation is money paid to cover a clear financial loss caused by the age discrimination, or as a result of going through remedy. It’s only paid when the loss is real, specific, and can be clearly shown.
Who can claim?
Who is eligible to make a compensation claim?
A compensation claim can be made by:
- A remedy member, or
- A personal representative of a deceased remedy member, or
- A designated person (who has ordinary or lasting power of attorney), where the remedy member is not deceased.
Types of claim
What are the types of compensation claims?
Compensation payments will fall into either automatic or non-automatic compensation claims.
Not eligible areas
What cannot be claimed for?
Compensation claims cannot be made and will not be accepted for:
- Professional advice or services that could have reasonably been obtained from the scheme manager.
- Areas where the member has already received compensation for the loss in question, or the compensation has been used to reduce an amount owed by the member.
- An unauthorised payment tax charge on lump sums.
- Indirect or hypothetical financial loss as a result of an employment decision (e.g. taken retirement earlier).
- An immediate choice member who is a taper protected member where either of their choices for remedy benefits results in a lower set of benefits than those in payment.
- Legal services fees incurred by a member in the case of litigation.
There may be other cases where the scheme manager will not accept the compensation claim, but the reasons for this will be explained to you and you will be able to raise an appeal if you disagree with the decision.
The timescales
When to make a claim?
You should make a compensation claim as soon as the direct financial loss has occurred. You may find that different aspects of remedy will affect your pension at different stages, so you may need to submit compensation claims at different times, when each direct financial loss arises.
Typically claims can be received up to six months after you have made remedy choice.
Applications received more than six months after you have made your election, may be accepted in exceptional circumstances.
The process
How to make a claim?
Complete the compensation claim form and submit it to your scheme manager.
You should submit a separate claim for each type or claim. You only need to do this for non-automatic claims.
As part of your claim you will need to provide:
- Justification as to how it meets one of the three claim categories (automatic; non-automatic compensation; or part 4 tax loss).
- Evidence of a direct financial loss such as a receipt, an invoice or a bank transaction.
- Calculations detailing the financial loss, such as a change in threshold entitlement for child tax credit.
- For a part 4 tax loss claim, a calculation that has been obtained from HMRC or a signed declaration that all information is given to best of your knowledge and belief.
Key stages
What happens once your claim is submitted?
Your scheme manager will keep you updated with when you can expect to hear back, but generally the process is:
What to do
If your claim is declined
If your compensation claim is declined by the scheme manager, you will be provided with details of how to raise a dispute through the internal dispute resolution procedure (IDRP).
You will also have the right of appeal to The Pensions Ombudsman.