NIRS2 (Hansard, 17 November 2000)

§ Mr. Rooker

The contract for NIRS2 was signed in 1995 and there have been problems with the system from the start, the full effects of which we are still trying to resolve.

We are sorry to report that the Benefits Agency (BA) will not complete its review of benefit claims affected by the delayed implementation of NIRS2 by the end of this year as had been expected. Although good progress has been made with outstanding cases in BA offices, full completion of the necessary benefits reviews is dependent on the clearance of work arrears in the Inland Revenue's National Insurance Contributions Office (NICO) that result in a change to the contribution record.

NICO is urgently looking at when it expects to have completed its own recovery from the late implementation of NIRS2. BA recovery cannot be achieved until after the NICO recovery has been achieved and this will not be by the end of this year.

As contribution records are brought up to date, BA offices will be prompted by NIRS2 to review an old or existing benefit claim if the change to the record has affected the previous benefit rate. Many of these prompted reviews however will not require the rate in payment to be revised because the contingency arrangements deployed by the Benefits Agency will have ensured the new NIRS2 rate is already in payment.

I would like to take this opportunity to express my regret and apologise to those pensioners and other benefit claimants who have been adversely affected by these delays. Although most benefit reviews have been completed and in the great majority of cases the rate in 807W payment found to be correct because of the contingency measures deployed by the Benefits Agency, my hon. Friend will wish to know that: 140,153 people have been underpaid a total of £58 million; of that number and amount, 123,924 are pensioners with underpayments amounting to £41 million; 267,590 people have received compensation amounting to £3.6 million comprising £2.7 million under the special £10 scheme I announced in February 1999 and £900,000 under the Departmental Special Payments Scheme; 6,564 people have been overpaid benefit amounting to £2 million; there were at 15 September 111,433 cases waiting to be reviewed by BA offices, of which 96,776 were pensioners and widows.

There are still a small number of new benefit and pension claims for which NIRS2 cannot provide all or some of the amounts payable. For these cases, contingency arrangements such as manual calculations remain in place. The priority is to ensure that benefit or pension is paid on time. Where this is not possible, however, payment of compensation is available either within the normal rules of the Department's Special Payments Scheme or by way of the special £10 scheme we announced on 1 February 1999.