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Benefits

Volume 126: debated on Monday 1 February 1988

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To ask the Secretary of State for Social Services whether he will ensure that severely disabled people who have a combined order book for attendance allowance and another long-term benefit receive as much compensation for the error in the retail prices index as those receiving the same benefits who have two order books; and how many people are in each of these categories.

Attendance allowance is paid at two rates, of which only the higher rate was affected by the error in the RPI. Because of the difficulty of distinguishing at the post office counter between recipients of the two rates, all AA recipients will be eligible for an ex-gratia payment. Where lower rate AA, received by nearly three fifths of AA recipients, is paid in combination with another long-term benefit, the £8 special payment is likely to compensate fully for any loss suffered. Where higher rate AA is paid with another long-term benefit, the degree of undercompensation will vary with the type of second benefit and the length of time for which the recipient is entitled to both benefits during the period April 1987 to April 1989. In these circumstances it would not be appropriate to make a second special payment to all recipients of attendance allowance, simply because a small minority may for special reasons receive benefit on two separate order books, both attracting an £8 payment. It is not known how many attendance allowance order books are held separately by claimants also receiving another long-term benefit, but the numbers are likely to be small.

To ask the Secretary of State for Social Services what categories of claimants will have lost more as a result of the error in the retail prices index than the amount of compensation they are to receive; what will be the average net loss per loser and the total net loss for each of these categories; and how much money is to be distributed to charities to make good these losses.

It is not possible to say with accuracy which claimants will have lost more than the amount of the special payments that they will receive because the flat-rate special payments exercise does not take account of whether claimants have been or would be entitled to benefit for the whole of the two years affected by the error in the retail prices index. Generally speaking, the types of claimants who are likely to be undercompensated are those who receive the higher rate of attendance allowance combined with retirement pension, invalidity benefit, or widow's benefit. In each case the maximum net loss per loser will be about £5. The total net loss for these retirement pensioners will be about £640,000; for the invalidity pensioners about £250,000; and for the widows about £5,000. These net losses will comprise about £900,000 of the sum to be distributed among charities.

To ask the Secretary of State for Social Services how much planned expenditure from the social fund for 1989–90 and 1990–91 is for maternity and funeral payments, cold weather payments, community care grants and the excess of leave over repayments, respectively.

These figures are planning figures and subject to review in the light of experience of running the social fund.

£ million
1989–901990–91
Maternity and funeral payments35·236·3
Exceptionally cold weather payments4·54·5
Community care grants6060
Net cost of loans3939