UK government pays up over social security crash

The UK Contributions Agency has agreed to pay compensation to claimants affected by the severe crash of the National Insurance Recording System (NIRS2) which left many out of pocket.

The computer, designed by Andersen Consulting, cost £170m to build but had to be shut down in July following a series of problems. Hundreds of thousands of benefit claims had to be estimated by National Insurance staff, leaving many underpaid.

Last week, social security secretary, Alastair Darling rejected calls for full restitution for those affected by the computer crash. But junior social security minister, Baroness Hollis told the House of Lords yesterday that anyone who experienced an "unreasonable delay" would automatically qualify for a one-off payment of £10. Opposition ministers hailed the decision as a U-turn in policy.

Darling released a statement confirming the flat rate payment of £10, claiming: "[I have been] concerned for some time about these delays and I am determined that any inconvenience suffered by those who would otherwise not get anything should be properly recognised."

However, Darling said compensation would only cover those people whose benefits had been dealt with under the contingency arrangements. He also warned it will take "a number of months for the payments to be made".