HC Deb 02 December 1999 vol 340 cc294-5W
Mr. Willetts

To ask the Secretary of State for Social Security what assessment he has made of the implications of NIRS2 problems for the implementation of stakeholder pensions in April 2001. [100646]

Mr. Rooker

IT support is one of a number of key issues we are addressing in the development of our implementation plans for stakeholder pensions. We are ensuring those plans take account of the difficulties so far experienced with NIRS2.

Mr. Webb

To ask the Secretary of State for Social Security when he expects to have eliminated all remaining delays in payment of retirement pensions resulting from the transfer to the NIRS2 computer system; and if he will estimate(a) the total number of such payments still outstanding, (b) the total amount still outstanding, (c) the total number of pensioners who have been affected since the problem first occurred and (d) the likely total cost of compensation. [101141]

Mr. Willetts

To ask the Secretary of State for Social Security (1) how many recipients of SERPS are receiving payments which have been estimated rather than calculated precisely because of NIRS2 problems; [100648]

(2) what provisions the Government have made to ensure that pensioners are not living in undue hardship because of the NIRS2 computer problems and benefit payment backlog; [100650]

(3) how much the Government have so far paid in compensation for NIRS2 delays; how much they expect to pay in future; and on what basis compensation is calculated; [100645]

(4) how many pensioners are suffering unreasonable delays in receiving contributory benefits as a result of the NIRS2 problems; [100649]

(5) how much money the Government still owes pensioners affected by the problems with NIRS2 in (a) unpaid benefits and (b) compensation. [100647]

Mr. Rooker

We have long-standing contingency arrangements to ensure that pensioners do not suffer undue hardship in the event that computer problems arise. Where NIRS2 cannot provide the information required to finalise a claim, clerical calculations are undertaken. Additional resources have been made available for processing the clerical calculations, of both additional pension and the increase earned by people who have deferred receipt of their pension beyond minimum State Pension age.

A National Insurance benefit task force was set up to assist people who experience difficulties or who have queries about the problems arising from NIRS2.

As at 31 October 1999 we have paid £2.113 million in compensation for NIRS2 delays to benefit recipients. Of this £1.986 million relates to the flat-rate £10 compensation payments and £0.127 million to payments made under the normal rules of the Department's Special Payments Scheme. It is not possible at this time to estimate how much more compensation will be paid because of NIRS2 delays.

The Department operates a long-standing non-statutory compensation scheme, the terms of which have been agreed by the Parliamentary Ombudsman and his predecessors. Under the terms of the scheme compensation is calculated using the "Retail Shares and Deposit Average Rate" provided by the Building Societies Commission. Compensation may be provided for any period of delay beyond normal processing time (referred to as the "indicator of delay") for the benefit concerned. The rate currently in use is 3.872 per cent. Where a person would be due more than £10 under the terms of that scheme he or she is paid the balance in addition to the £10 outlined above.

As at 1 November 1999 the Inland Revenue estimate the cost of additional payments to Pension Providers, in respect of individual scheme members, for the delay in the payment of Age Related Rebates, was £36.2 million.

Up to the time that NIRS2 began providing Retirement Pension calculations on 6 January 1999, it was estimated that 285,000 pensioners had been affected by NIRS2 problems. Of these there remain about 40,000 cases to be reviewed. Not all of these will be in receipt of an incorrect amount of benefit.

Since 6 January NIRS2 has not been able to provide the amount of additional pension (SERPS) in about 10 per cent. of the cases in which it is known SERPS entitlement exists. For these estimated 60,000 claims a year the Benefits Agency is carrying out clerical calculations, with a view to ensuring that all new pensioners are receiving their full entitlement by the date of their retirement. In total, therefore, the maximum estimated number of new pensioners affected by NIRS2 problems to the end of 1999 will be 345,000.

Information about the full amount of Retirement Pension which has been underpaid because of the delayed implementation of the NIRS2 computer, and the compensation payable, will not be available until recovery action is complete. This is expected to be during next year.