HC Deb 18 January 1999 vol 323 cc368-70W
Ms Walley

To ask the Secretary of State for Social Security, in relation to North Staffordshire Benefits Agency, how many persons pension contributions have not been processed due to delays arising from the changeover of the computer dealing with retirement pension rights; what the reason is for the further projected delay in the changeover of the computer; what is the new projected date for the new computer to be in full working order; and what arrangements he has put in place to cover the period during which the computer is inoperative; how these arrangements have worked; and if he will make a statement. [65371]

Mr. Timms

My right hon. Friend the Secretary of State for Social Security in his Written Answer on 4 November 1998,official report, columns 603–06, advised the House that the Contributions Agency had introduced a new National Insurance Recording Computer System. During the first year of operation the system is being introduced through a series of pilots leading to national implementation.

Progress has been made against plans to move pilots into national operation. The NIRS2 link to the Jobseeker's Allowance computer system was implemented nationally on 9 November 1998 and new claims are now being dealt with through the normal interface between the two systems. The NIRS2 reports used for Incapacity Benefit were implemented nationally on 18 November 1998. Reports are being carefully screened before being released to Benefit Agency local offices.

Retirement Pensions and Widows Benefit calculation facilities became nationally available on 6 January 1999. The Benefits Agency is continuing to make initial awards of Retirement Pension and emergency payments to widows and those claiming Retirement Pension where no record of the contribution history is available.

The Benefits Agency has continued to identify and distribute claim packs automatically to those individuals approaching pension age using information from the previous National Insurance Recording system (NIRS). All initial awards of Retirement Pension have been calculated using the information from the old NIRS system. This contingency arrangement has worked well since the conversion to the new NIRS2 system began on the 19 June 1998. 97 per cent. of all claims to Retirement Pension have been processed using information from NIRS. Initial awards made since April 1998 will be reviewed when the 1997/98 National Insurance Contribution information has been posted to account. The Benefits Agency hopes to begin reviewing these claims from April 1999.

The Benefits Agency has increased the capacity to calculate clerically entitlement to State Earnings Related Pension Scheme for people who request it. 3,500 such calculations have been completed.

On 4 November 1998, official report, columns 603–06, I reported that over 14 million National Insurance contributions for 1997/98 had been recorded on individual accounts. On 11 January the number of contribution items posted had risen to 31 million. We normally expect to record about 47 million contributions each year by the end of December. We hope to have recorded the balance by March 1999.

On 4 January 1999 the cumulative total of age-related rebate payments, paid to Occupational and Personal Pension Schemes in respect of individual scheme members in this financial year, increased from £630 million to £1,411 million, nearly 60 per cent. of the expected total for the year. This includes the December payment of £385.57 million and the January payment of £392 million. The figure includes a compensation element to compensate individual scheme members for any loss of investment income because of delayed payments.

By 31 December 1998, the cumulative total of contributions collected from the self-employed through Direct Debit and Quarterly Billing facilities in this financial year had increased to £342.5 million. In December £34.25 million was collected from 1.34 million self-employed contributors who pay contributions by Direct Debit and in January a further £42.3 million has been requested.

Scottish Juvenile registrations, for issuing National Insurance numbers, were processed and the plastic National Insurance Number (NINO) cards are currently being issued. Adult registrations are currently being processed using the NIRS2 on-line facility and plastic NINO cards are being issued.

New registration facilities for self-employed people, who want to pay their contributions by monthly Direct Debit, are being piloted. New registration facilities for self-employed people who pay contributions quarterly became available to specialist staff in Contributions Agency from 14 December 1998.

From the first Monday of the new benefit year, 4 January 1999, new claims to Incapacity Benefit and Jobseeker's Allowance are being based on contributions paid during the 1996/97 and 1997/98 tax years. It is estimated that 65 per cent. of the relevant 1997/98 contributions have been posted to NIRS2. Whilst the remaining 1997/98 contributions are still being recorded in NIRS2, information to pay some new claims will need to be obtained from other sources.

The expected number of claims in January 1999 where contribution information will need to be obtained from other sources for Jobseeker's Allowance will be approximately 75,000 and for Incapacity Benefit approximately 21,000. These figures will be lower in February and March because additional National Insurance contribution information will be available on NIRS2, and by April 1999 all the National Insurance contributions needed should be available on the system. Claims will be automatically reviewed when 1997/98 National Insurance Contributions are posted.

There are long-standing contingency instructions in place to deal with these cases, and the Benefits Agency will advise customers if any additional information is required to deal with their claims. Both Jobseeker's Allowance and Incapacity Benefit contingency arrangements are in place from 4 January 1999.

Considerable effort has been jointly made by DSS Agencies, pensions industry and Andersen Consulting to maintain service levels. Staff from the Contributions Agency, Benefits Agency and Andersen Consulting were working together throughout the Christmas period to resolve the outstanding problems.

All the work involved is being taken forward through a co-ordinated plan agreed between the DSS Agencies involved and Andersen Consulting. Within the plan, priority is being given to those aspects of the NIRS2 system, which most directly affect benefit claims. I continue to expect that it will take until the end of this financial year to resume normal operations in full, and it will take longer to catch up on all backlogs. I shall keep the House informed of progress.