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Pensioners: Means-Tested Benefits

Volume 589: debated on Thursday 30 April 1998

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3.10 p.m.

asked Her Majesty's Government:

How many pilot schemes to extend automatic help to pensioners not claiming the means-tested income support to which they are entitled have so far been launched, where they will be sited and when they will report.

The Parliamentary Under-Secretary of State, Department of Social Security
(Baroness Hollis of Heigham)

My Lords, from this month we are running pilot projects in nine areas of the country to find the best way of encouraging pensioners to make a claim for income support. We are also experimenting with ways of making the delivery mechanism more automatic to prevent the problem recurring in the future. The pilots which my noble friend asked me about are taking place in York, Preston, Glasgow, Stroud, East Renfrewshire, Lambeth, Torbay, South Staffordshire and Torfaen. The results should be available by the spring of 1999, after which we will consider how best to proceed nationally.

While I am grateful for the detail of that reply, could I ask the Minister whether these pilot schemes, of which she has given details, relate to automatic means of helping the poorest pensioners? I am sure that she would be the first to agree that that is not the same as encouraging people to take up means-tested benefits. Will the Minister therefore give me an answer to this question? How many pilot schemes are there into ways of ensuring automatic help, which, by definition, I would have thought means benefits as of right or contributory benefits? Are there any such pilot schemes, and if so, how many; where are they and when will they report?

My Lords, my noble friend is absolutely right that there clearly is a dilemma for the Government in that if one has an automatic entitlement, irrespective of income, to additions to the basic state pension, then the entire population over the age of 65, including a large number of your Lordships, would automatically benefit. I am not suggesting for one moment that your Lordships would not be meritorious, but noble Lords might regard themselves as not necessarily having the first claim on resources in this area. The moment one goes for targeting on a means-testing basis, as my noble friend said, there are real problems about take-up, given the issues of the complexity of the benefit, stigma and ignorance. As my noble friend queried, that is why in the pilot schemes we are looking to see whether we can get automaticity—an ugly word—in the passporting of benefits to elderly people. They are mostly single women over the age of 75 years. The kinds of projects that we are looking at in our pilot schemes include working with local authorities to see whether one can piggy-back, for example, off entitlement to council tax benefit and housing benefit, and whether with social services we can ensure everyone getting the attendance allowance is also claiming income support to which they are entitled. We are also developing an experiment in London for electronic claim forms. Just before someone reaches their 65th birthday they are telephoned and asked for details of their income and capital cut-off point to see whether we can get automatic entitlement to income support to them. In these ways I hope that we are addressing the concerns of my noble friend.

Does not the Minister agree that the administrative cost of helping pensioners through means-tested benefits is much greater than that of administering a state insurance contributory pension scheme? It is something like £5 per week per recipient. Therefore, this elaborate effort to get people to take up more is going to add to the cost. Could she tell us, please, what would be the cost if all the pensioners entitled to income support were now, as a result of these activities, to claim it?

My Lords, my noble friend is correct. The retirement pension costs 55p per week to administer per claimant, and income support entitlement, irrespective of age, costs something like £4.20 a week to administer. So my noble friend can see that if I million pensioners were to claim income support to which they were entitled there would be a substantial administrative cost as well as the much bigger cost of take-up. But we believe that it is important that poorer pensioners today get the money to which they are entitled. Therefore, it is a cost that we must accept.