ClickAJob News

Alistair Darling is not to push for tens of thousands of public sector staff, NHS workers and service personnel to repay as much as £100 million in pension overpayments.

While pensioners will not be asked to repay excesses, their future pension payments will be cut.

The scandal was brought to light by Vince Cable, Liberal Democrat shadow chancellor, in parliament yesterday.

"One thing the government need like a hole in the head is another administrative disaster like the loss of computer discs, but I am afraid that they have one with public sector pensions," he told parliament yesterday.

He explained a journalist from Radio Ulster had contacted him about the problem with Xafinity Paymaster, the firm charged with paying public sector pensions, and warned it was about to start retrieving the money from the pensioners.

"I hope that none of us will face the possibility that large numbers of ex-servicemen will suddenly be faced with bailiffs turning up and asking them to repay overpayments, as we have already seen in the appalling instances involving tax credits," Dr Cable said.

Mr Darling made it clear pensioners receiving too much in their pensions would not be called to repay the cash – effectively writing off the loss.

However, future pension payments will be cut.

The chancellor said: "It will be necessary to adjust what is paid in the future, but the government recognise that there have been such payments for a long time.

"I would not want people to think that we will start clawing back money that has been paid erroneously. Things need to be put right from next year."

The FT reports the loss will be recouped from individual government department's budgets, with the Department of Health likely to face the largest cost.

Full details will be released later by the Cabinet Office.