§ Mr. Denham
The proposed changes to the rebates for Contracted-out money Purchase (COMP) schemes are designed to protect the National Insurance Fund (NIF) from occupational schemes switching their method of contracting-out solely to take advantage of the higher overall rebate available to COMP schemes. This switching means that more is paid out in rebates from the NIF than was originally intended. The changes will reduce that loss.
The information on the effect of increasing the rebates for Appropriate Personal Pensions (APP) is in the table.
Tax year Cost to the NIF of increasing rebates to APP holders 1998–1999 Nil 1999–2000 Nil 2000–2001 £140 million
1. As age-related rebates for APP's are not paid until after the end of the tax year to which they relate, the changes being introduced in April 1999 will not begin to impact on the NIF until 2000–2001.
2. The figure for 2000–2001 has been rounded to the nearest £10 million.
Government Actuary's Department (GAD).