§ Mr. Flanneryasked the Secretary of State for Social Services when he will be laying regulations which provide for a refund of national insurance contributions to employees who pay increased national insurance contributions under the new pensions scheme during 1978–79 but are unable to qualify for additional pension under that scheme because they reach pensionable age in that year.
§ Mr. OrmeMy right hon. Friend has today laid regulations which make provision for these refunds of contributions. We have decided to give these refunds because people who reach pensionable age in 1978–79, the first year of the new pensions scheme, are in a very special position. They have to pay the increased contributions of the new scheme but there is no way in which they can qualify for any benefit under it. In this respect their position is quite different from that of younger employees who will be able to qualify for an earnings-related retirement pension. The regulations provide that320W refunds may be claimed when pensionable age is reached. The refund will be three-twenty-sixths of the standard rate primary Class 1 non-contracted-out contributions which have been paid in 1978–79, but no payment will be made where the amount involved is 50 pence or less. The refunds will have the general effect of causing the employees to pay contributions as if calculated at the rate of 5¾ per cent. of earnings—which is what they pay in the present year towards the present range of benefits—instead of at 6½ per cent. which is the rate which will be payable in the new tax year.
Our intention is that when a person is sent a notice of award—or rejection—in respect of his claim for retirement pension this will be accompanied by a letter which explains the circumstances in which refunds are made and invites him to make a claim if he thinks that he is qualified to receive one. But where a person reaches pensionable age soon after 6th April, the invitation is likely to be delayed by a few weeks whilst procedural arrangements are being set up.
§ Mr. Blakerasked the Secretary of State for Social Services in how many cases a decision was taken by his Department not to prosecute (a) an employee, (b) an employer, (c) a self-employed person and (d) a non-employed person for non-payment of national insurance contributions in (i) 1969 and (ii) 1970.
§ Mr. OrmeBefore 1975 there was no power to prosecute employees for non-payment of national insurance contributions. In the case of employers, self-employed persons and non-employed persons only local records were kept of decisions not to prosecute, and those for 1969 and 1970 have since been routinely destroyed. But the numbers would have run into thousands.
§ Mr. Blakerasked the Secretary of State for Social Services in how many cases in each of the years 1975–76 and 1976–77 self-employed people applied for exemption from payment of national insurance contributions on grounds of small earnings; and in how many cases these applications were granted.
§ Mr. Orme27,132 applications for small earnings exception were granted for the 1975–76 tax year and 37,352 for the 321W 1976–77 tax year. No record is kept of the number of cases in which application for small earnings exception is not granted.