HC Deb 16 January 1984 vol 52 c130W
Mr. Rooker

asked the Secretary of State for Social Services if, pursuant to the reply of 20 December 1983. Official Report, c. 211–2, he will give details of how amounts paid in respect of compensation for delay are calculated.

Dr. Boyson

Following a recommendation from the Select Committee on the Parliamentary Commissioner for Administration, compensation is paid when delay in payment of benefit is caused by clear and unambiguous official error. The method of calculation is modelled on the statutory provisions for compensation for delay in making refunds of tax: compensation normally takes the form of interest at the rate used in the Inland Revenue scheme calculated on the arrears of benefit in each tax year following the first 12 months of delay. Compensation is not paid in respect of benefit due for the tax year in which payment is finally made. For the exceptional case in which delay is more than 10 years, the calculation of compensation is on a basis of compound interest.