HC Deb 24 January 1986 vol 90 cc332-3W
Mr. McNamara

asked the Secretary of State for Defence if he will explain the criteria currently being used to decide whether compound interest is paid to some service pensioners who are underpaid and only simple interest is being paid to others.

Mr. Lee

There are no such criteria. Where compensation is paid for loss of interest this is calculated on compound terms.

Mr. McNamara

asked the Secretary of State for Defence what is the percentage error rate found in the systematic check of Royal Navy/Royal Marines ratings pension awards; on what percentage of cases in which an error was found no action has been taken; and what proportion of the total are accounted for by (a) potential errors where an incorrect award will be made when the Royal Naval-Royal Marine rating reaches 55 years of age and (b) cases where the pensioner has died and payment may be due to the estate.

Mr. Lee

The error rate is 2.5 per cent. There are no cases in which an error has been found and where action has not been taken. In 0.16 per cent. of cases checked the error found would have affected the award when the pensioner reached age 55. In 0.03 per cent. of cases checked the pensioner has died and payment will be made to the estate.

Mr. McNamara

asked the Secretary of State for Defence what Her Majesty's Government's policy is for correcting all overpayment and underpayment errors discovered on service pension awards.

Mr. Lee

For errors discovered on service pension awards as a result of the current special checks the policy for correcting underpayments and overpayments is for action as follows:

  1. (a)Underpayments. The corrected rate of pension to be brought into issue as soon as possible, arrears due to be calculated and paid, and a compensation payment to be made for notional loss of interest.
  2. (b)Overpayments. The corrected rate of pension to be brought into issue as soon as possible. Overpayments will be regarded as having been accepted in good faith and, unless there is evidence to the contrary, recovery will not be sought.

Mr. McNamara

asked the Secretary of State for Defence, of the total number of errors found in the current check of service pension awards, what proportion were (a) overpayments and (b) underpayments; and what was the average amount of error found in (a) overpayments and (b) underpayments.

Mr. Lee

The overall rate of errors found is 2.4 per cent. Within that rate just under half—45.6 per cent.—of errors have resulted in overpayments and just over half —54.4 per cent.—in underpayments. The average rate of error is £107 per annum for overpayments and £226 per annum for underpayments.

Mr. McNamara

asked the Secretary of State for Defence whether he has any plans to move from its present location the task of checking for errors on Royal Navy and Royal Marine ratings pension awards.

Mr. Lee

Responsibility for Royal Navy ratings' and Royal Marine other ranks' pensions work is in process of transfer from director general defence accounts at Worcester to HMS Centurion, and the remaining task of checking for errors forms part of that transfer. From 1 April 1986 responsibility for all Royal Navy and Royal Marine pensions will rest with HMS Centurion.

Mr. McNamara

asked the Secretary of State for Defence if he will take steps to process the backlog of errors found but not yet dealt with in Royal Navy and Royal Marine pension awards.

Mr. Lee

There is no backlog in correcting rates of pension in issue. For the cases of underpayment the arrears and associated compensation are currently being calculated and payment will be made shortly.