§ Mr. David MartinTo ask the Secretary of State for Social Security what plans he has to change the way in which assumed amounts of national insurance contributions are calculated in determining the net amount of estimated earnings and bonus and commission payments in the assessment of family credit and disability working allowance entitlement.
726W
§ Mr. BurtMy right hon. Friend the Secretary of State laid before Parliament on 10 March 1994 amendments to the family credit and disability working allowance regulations on the calculation of these assumed amounts. Because of the difficulty of ascertaining the actual rate of contribution for which the person would be liable, it has been the practice to make all the calculations at the rate applicable to a person who is not contracted out of the state earnings-related pension scheme. This was considered to be within the terms of regulations 20, 20A and 26 of the Family Credit (General) Regulations 1987, and regulations 22, 23 and 29 of the Disability Working Allowance (General) Regulations 1991, but recent legal advice is that they do not permit this. In consequence, overpayments have occurred since the introduction of the schemes, in April 1988 and April 1992 respectively, amounting to a total of about £725,000. The cost of the administrative arrangements which would be required to prevent the overpayments would be well in excess of the amounts overpaid. The regulations are therefore being amended urgently to regularise the situation and, in the meantime, the additional payments are continuing to be made on an ex-gratia basis. A note will be included in the relevant appropriation account.