HC Deb 28 February 2000 vol 345 cc172-3W
Mr. Worthington

To ask the Secretary of State for Social Security if he will make a statement on the impact of the Social Security (Recovery of Benefits) Act 1997 on(a) public finances, (b) speed of settlement of cases, (c) insurers and employers and (d) victims of illness, accident and diseases. [111683]

Mr. Bayley

The compensation recovery scheme was reformed in October 1997 when the provisions of the Social Security (Recovery of Benefits) Act 1997 came into force. The main objectives of the reformed scheme were that a person should not get compensation twice over for the same need; the taxpayer should receive the fullest possible protection; the scheme should allow damages for pain and suffering to be paid in full; the scheme should not result in Government becoming directly involved in the compensation process; and the simplicity of the previous scheme, which helped ensure that administration costs run at less than 5 per cent. of the amount recovered, should be preserved.

The objectives have been achieved: the main changes in the scheme brought about by the Act are that compensators are liable to repay benefits in full; compensators may reduce compensation payments to take account of the liability to repay benefits, but only where benefits and compensation are paid for a like need; compensation for pain and suffering cannot be reduced. The reformed scheme has been designed so that the negotiation process can be as flexible as possible, allowing claims to be settled quickly. Administration costs continue to be less than 5 per cent. of the amounts recovered, which in 1998–99 was £201.5 million.