NIRS2 (Hansard, 15 March 1999)

§ Mr. Darling

My hon. Friend the Minister of State, Department of Social Security, in his written answer on 18 January 1999,Official Report, columns 368–70, 487W updated the House about progress that the Contributions Agency had made in addressing outstanding issues relating to the introduction of the new National Insurance Recording System (NIRS2). These issues include recording 1997–98 National Insurance Contributions, links between the NIRS2 system and claims for benefit, and wider roll-out of NIRS2 functionality.

Since January the Contributions Agency has worked closely with Andersen Consulting to address these issues. Details of the progress that has been made are set out. Where issues have not yet been fully resolved, the Contributions and Benefits Agencies have endeavoured to minimise their impact on individuals and action is being put in place to identify the best way forward.

In the light of outstanding issues relating to the introduction of NIRS2, it has been necessary to review the Contributions and Benefits Agencies' objectives for the remainder of the year and to re-prioritise activity. To ensure that we receive the greatest benefit from the system capacity, I have decided that the recording of 1997–98 National Insurance Contributions and payment of age-related rebates should be the first priorities. This will minimise the disruption to individuals and ensure that payments to individuals' personal pensions are made. However, a consequence of this decision is that some system backlogs will not be cleared until into the next financial year.

My hon. Friend the Minister of State reported that, at 11 January, 31 million National Insurance contributions for the tax year 1997–98 had been posted. At 14 March 1999, 39 million items had been posted for the year, with 5.8 million items still to be posted. Action is underway to clear these outstanding items swiftly.

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 has increased from £1,411 million on 4 January 1999 to £1,882 million on 1 March. This is over 75 per cent. of the expected net total for the year. (The cumulative total figure includes a compensation element.) Action is underway to clear the outstanding backlog.

The NIRS2 link to Retirement Pensions, Widows Benefit, Jobseeker's Allowance and Incapacity Benefit is being used to process new claims to benefit. Where 1997–98 contributions are not yet recorded, there is a continuing need to make initial awards of Retirement Pension and emergency payments to widows. Initial and emergency awards of National Insurance benefits made since April 1998 will be reviewed following completion of the recording of 1997–98 National Insurance contribution information. The Benefits Agency hopes to begin reviewing these claims from April 1999.

The Benefits Agency continues to calculate entitlement to State Earnings Related Pensions clerically for people who request this. 5,703 such calculations had been completed at 15 March.

By 8 February 1999 a cumulative total of over £415 million of self-employed and voluntary National Insurance contributions had been billed and/or collected through the monthly payment method. In addition, over £286 million had been billed through the quarterly payment method.

488W

New registration facilities for self-employed people who want to pay their contributions by monthly Direct Debit or by quarterly bills are fully operational.

Adult registrations continue to be processed using the NIRS2 on-line facility and plastic National Insurance Number (NINO) cards are being issued. The exercise to process Scottish Juvenile registrations is complete. The full Juvenile Registration facilities were made available on 10 March 1999.

All the work involved is being taken forward through a coordinated plan agreed between the Agencies involved. In order to minimise the impact on customers, we have set up a Benefits Agency taskforce that will take on responsibility for benefit claims affected by the delays. This will give customers a single point of contact by both telephone and post. The taskforce can be contacted, at local call rates, on 08456 010586 between 08.30 and 16.30 Monday to Friday, or customers can write to the taskforce at PO Box 6, Newcastle Upon Tyne, NE98 1XB.

Ministers will keep the House informed of progress.