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Pensioners (Means Testing)

Volume 453: debated on Monday 27 November 2006

5. How many pensioners are (a) eligible for and (b) claiming means-tested benefits in (i) Great Britain and (ii) Northamptonshire; and if he will make a statement. (102900)

It is estimated that around half of pensioners living in private households in Great Britain are eligible for means-tested benefits. Of those entitled to guarantee credit, 70 to 81 per cent. are estimated to be claiming, although 43 to 50 per cent. of those entitled to savings credit are estimated to be claiming. Since its introduction, pension credit has lifted 2 million pensioners out of absolute poverty. An estimate for Northamptonshire is not available.

It is disappointing that figures for Northamptonshire are not available, as I suspect that thousands of pensioners in the Kettering constituency are entitled to means-tested benefits but are not claiming them. While congratulating Kettering’s citizens advice bureau, welfare rights advisory service and Age Concern for doing all that they can to encourage pensioners to claim, what specific steps are the Government taking to ensure that more pensioners claim the tax credits and other benefits to which they are entitled?

The hon. Gentleman will be delighted to know that, last year, the Pension Service visited more than 1 million people, and is calling 5,000 people every week. Take-up has increased from 74 per cent. to 81 per cent. When we came to power, there were 3 million pensioners in poverty, but now there are fewer than 1 million. That may not be perfect, but it is very good progress, and it would not have happened under his party, which opposed every one of those measures.

Control of the growth of means-testing is one of the stated objectives of the Government’s pensions reform programme. The Government estimate that means-testing will fall to less than 30 per cent. by 2050 under their proposals. However, the Pensions Policy Institute, a respected independent think tank, estimates that the figure will be closer to 50 per cent? Is it wrong?

We have been working with the institute on the reforms, and will shortly put forward figures that narrow the funnel of doubt, as it is described. We have published information on our website, which everyone can look at, setting out our estimates. We are confident that those are right and that our system is more effective at modelling the impact of the state second pension, and that our reforms will result in less than a third of people being entitled to means-tested benefits compared with 70 per cent. if the current policy continued.

We shall see, but even if the Department for Work and Pensions’ figures can be substantiated, a third is still a high level of means-testing in the system. Discounting the Liberal Democrats’ fantasy proposals, we accept that there is no easy and affordable way of further reducing means-testing in the short term. Bearing in mind the Chancellor’s 1994 commitment to eliminating the massive means-testing now imposed on the elderly, will the Minister say whether the Government share our long-term aspiration to see the level of means-testing fall still further, as and when that becomes affordable in future?

It depends entirely on how the hon. Gentleman’s party proposes to do that. He is right to say that the Liberal Democrats’ policy is a fantasy, because it would put 5p on income tax. According to the 2005 figures, however, about half those receiving means-tested benefits are receiving disability benefits or carers’ premiums, which means that they can collect £160 a week in pension credit. I assume that the hon. Gentleman is not saying he would want to take that money from such vulnerable groups.

One of the groups who find the situation hardest are pensioners who own their homes and are eligible for council tax benefit. They have not previously been in the benefit system, and are concerned about giving information. The take-up of council tax benefit in that group is comparatively low. What are the Government doing to try to increase take-up of council tax benefit among pensioners on fixed incomes?

That is a very good point. We are transforming the system for claiming council tax benefit and, indeed, housing benefit. People used to have to fill up a 26-page form; now there is a three-page form which can be filled up in minutes. A survey by Age Concern of people who had claimed the benefit showed that 70 per cent. found it easy. I encourage the hon. Gentleman to work with his constituents to ensure that as many as possible claim.