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Means-tested Benefits

Volume 495: debated on Monday 29 June 2009

The latest estimates of take-up across the five income-related benefits in 2007-08 were published last Thursday. For the income-related benefits that my Department measures, £35.2 billion was claimed, which represents overall take-up by expenditure of between 77 per cent. and 85 per cent.

Between £200 million and £300 million per day is going unclaimed in jobseeker’s allowance, income support, pension credit and council and housing tax benefits because people—especially the poorest pensioners—are unaware of their entitlement, confused by complexity, or unwilling to take what are seen as handouts. Will the Minister step up a gear on take-up campaigning, and move at full speed out of the present means-measuring morass towards the automatic payment of benefits, as Help the Aged is urging her to do?

I agree with my hon. Friend that take-up is vital to tackling pensioner poverty. He has raised the Help the Aged campaign for the automatic payment of benefits. We are taking powers in the Welfare Reform Bill to enable us to undertake pilots to do precisely that. My hon. Friend is assiduous in defending the interests of his constituents, and I congratulate him on launching the first contact pilot in North-West Leicestershire, which brings together the work of the local authorities, the Department for Work and Pensions and the voluntary sector and is precisely aimed at increasing take-up.

Over the weekend, a constituent came to my surgery who has been a higher rate taxpayer but is now not entitled to any unemployment benefit because of the levels of his savings. Does the Minister not agree that that kind of means-testing discriminates against those people who have paid substantial amounts in taxation over many years and gives perverse incentives to people not to save?

In response to the problems faced by people with large levels of savings, the Chancellor announced an increase in the capital disregard from £6,000 to £10,000, which should have a significant impact on constituents such as the hon. Gentleman’s.

I welcome the hon. Lady to her new position. Is it any wonder that, with £5 billion of means-tested benefits going unclaimed by pensioners every year, 2.5 million are living in official poverty? Why are Ministers trying to sweep under the carpet the effect of means-tested benefits on the new system of personal accounts? Does she not care that many thousands could end up worse off as a result of being auto-enrolled into personal accounts?

The hon. Gentleman should be aware that 95 per cent. of people are covered by personal accounts. I am not sure whether he is conscious of the fact that since November it has been the case that claims for housing benefit and council tax benefit can be made in one telephone call, alongside those for pension credit. That will speed up the process and make it far easier for people to get their council tax benefit.