Deficiency notices back in the mailbox

The Inland Revenue has renewed efforts to issue deficiency notices and update people on their entitlement to a full state pension through payment of National Insurance Contributions (NICs).

The Department for Work and Pensions (DWP) estimates individual benefit entitlement will increase by £103m at the conclusion of the exercise, while also generating £81m in additional NI contributions.

According to the National Audit Office , sending of deficiency notices by the Contributions Agency was halted after 1995-96 to focus on the introduction of a new NIRS2 system.

Between October 2003 and September 2004 the Inland Revenue again began notifying working age customers who were due deficiency notices in the six years leading up to 2001-02 there may be a shortfall in the amount of NIC paid, however, the DWP was forced to take he responsibility for writing to those who had reached state pension age during that time.

The issuing of deficiency notices had become the duty of the Inland Revenue, started up again late last year, with total administrative costs sitting at £100m so far.

Head of the National Audit Office, Sir John Bourn says: "Issuing millions of retrospective Deficiency Notices to the public will cost an estimated £100m but the full increase in people’s entitlement to benefits as a result of the exercise is not yet known, particularly for those who have retired in recent years. I will consider further progress in future years.”