Andersen Consulting has defended claims that the computer system it is installing for the Contributions Agency is responsible for chaos surrounding National Insurance contributions.

A report published by the Commons Public Accounts Committee claims that widows, pensioners and the disabled are losing up to £100 of benefits a week because of a computer fiasco.

The report shows that 17 million National Insurance contributions had not been entered as of January this year. Last night, government ministers said there were still 350,000 contributions to be entered onto the system.

A new National Insurance Contributions computer system - NIRS2 - was expected to be running by February 1997, but did not go live until last July. Its job is to store details of 65 million NI accounts and calculate entitlement to contributory benefits.

Andersen today criticised the report, saying it is several months out of date and "was set against an uncertain background during the early months of the changeover to NIRS2."

"The position is different today," said Andersen in a statement. "In May the system completed the processing of around 47 million National Insurance returns from the previous tax year, over half had been submitted to the system with invalid data which then needed to correction by Agency staff."

"Despite the fact that this year around half of the returns are again invalid, the system has already processed over 20 million successfully, which is well ahead of plan."

The Contributions Agency said it believed that the computer system would be fully functional on delivery, while Andersen said the system would need six to nine months testing. The committee said they were "astonished" that the two parties had such conflicting views.

Andersen admitted that there have been hiccups introducing the new National Insurance system. "Difficulties were inevitable given the pioneering scale of the change," the company said, adding that it has worked hard to help minimise difficulties.

Andersen claims that over 2,500 staff in the National Insurance Contributions Office are now using the system to transact business and that millions of benefit, contribution and pension transactions are now processed successfully each week.

Andersen has paid £3.1 million compensation to the government, according to the report. "All possible steps" must be taken to make Anderson pay if it is found to be the cause of the contributions fiasco, the report says.

The government has pledged that no one will be out of pocket due to the contribution problems.

The report said that "some of the most vulnerable members of society are being underpaid by up to £5 a week and in exceptional cases £100 a week, through no fault of their own."

The committee also condemned the fact that some elderly people have been paid more than they should have and have been sent forms to return the overpayment, causing "distress and uncertainty."