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Effects on expenditure
£ million (saving)
|(a) |(b)
|Gross |Net of other
|benefit
|changes<1>
------------------------------------------------------
Cash
1990-91 |1 |1
1991-92 |18 |17
1992-93 |43 |41
1993-94 |64 |61
1989-90 Prices
2000-01 |140 |130
<1>Income-related benefits.
(c), (d) Reduced earnings allowance is not taxable.
Long-Term Incapacity
Mr. Alfred Morris : To ask the Secretary of State for Social Security how many people are currently receiving a benefit for long-term incapacity under occupational sick pay schemes ; and if he will break down the figures by sex and standard age cohorts.
Mr. Scott : Out of a total work force of 22 million it is estimated that just under 13 million (58 per cent.) have occupational sick pay cover for long-term sickness. These comprise about 6.5 million men (54 per cent. of the male work force) and 6 million women (61 per cent. of the female work force). Information about the coverage of age is not available. The information is based on the report on occupational sick pay schemes by IFF Research Ltd. for the Department of Social Security, published in November 1988.
Mr. Alfred Morris : To ask the Secretary of State for Social Security what is the average payment currently being received by recipients of a benefit for long-term incapacity under occupational sick pay schemes ; and if he will break down the figures by sex and standard age cohorts.
Mr. Scott : I regret that information is not available in the form requested. The report on occupational sick pay schemes shows that 57 per cent. of all employees with long-term sick pay cover receive a percentage of salary when sick and a further 19 per cent. receive a scale rate. Payments for the remainder are calculated on a variety of different bases-- for example, full basic salary, a flat rate amount or a discretionary rate.
Reduced Earnings Allowance
Mr. Alfred Morris : To ask the Secretary of State for Social Security how many people are currently receiving reduced earnings allowance as a supplement to their earnings ; on what criteria he bases his proposal to abolish entitlement to reduced earnings allowance in such circumstances ; and if he will make a statement.
Mr. Scott : On the basis of information for April 1988, just under 150,000 people received reduced earnings allowance. Of these, about 24,000 were likely to have been in work. Potential changes in benefits policy are assessed according to the criteria set out in paragraph 4 of Cm. 615 "The Government's Expenditure Plans 1989-90 to 1991-92".
Severe Disablement Allowance
Mr. Alfred Morris : To ask the Secretary of State for Social Security if entitlement to the proposed age-related addition to severe disablement allowance will be based on
Table file CW900119.046 not available
age at the introduction of the addition or the age of the severe disablement allowance recipient at the commencement of the period of their incapacity for work ; and if he will make a statement.
Mr. Scott : We propose to introduce payment of the new age-related addition to severe disablement allowance from December 1990. The rate of the addition will be related to the age of the recipient at the time the incapacity for work began.
Disability Allowance
Mr. Alfred Morris : To ask the Secretary of State for Social Security if he will place in the Library the models of a points system disability allowance referred to in paragraph 3.15 of "The Way Ahead."
Mr. Scott : I will shortly place in the Library further information about the disability cost allowance based on a points index which is referred to in paragraph 3.15 of "The Way Ahead".
Mr. Alfred Morris : To ask the Secretary of State for Social Security what assumptions were made about existing entitlement to attendance and mobility allowance in the models of a points system disability allowance referred to in paragraph 3.15 of "The Way Ahead" ; and if he will make a statement.
Mr. Scott : The points-based benefit schemes referred to in paragraph 3.15 of "The Way Ahead" would have replaced attendance allowance and mobility allowance.
Disabled People
Mr. Alfred Morris : To ask the Secretary of State for Social Security on what criteria he has decided to exclude from the Government's proposals in "The Way Ahead" any help for people with disabilities with extra costs other than those arising from mobility or attendance needs ; and if he will make a statement.
Mr. Scott : The surveys of disability carried out by the Office of Population Censuses and Surveys found that attendance allowance and mobility allowance are well directed towards the most common of the more costly disabilities. Locomotion and self-care disabilities are associated with relatively high disability-related expenditure. Equally important, the benefits provide help to people with other disabilities in the frequent cases where they are combined with locomotion or self-care disabilities.
Invalidity Pension
Mr. Flynn : To ask the Secretary of State for Social Security what is the estimated saving in each year up to 2030-31 resulting from the phasing out of entitlement to earnings-related invalidity pension, gross and net of additional spending on invalidity allowance.
Mr. Scott [holding answer 16 January 1990] : The available information on gross savings from ending the accrual of new rights to invalidity benefit additional pension is given in the table. The estimates are based on long-term projections of expenditure on additional pension which are subject to considerable margins of error ; the savings estimates beyond 2000-01 are
Column 484
particularly uncertain. Since annual figures would therefore imply a spurious precision, the estimates are given at five -year intervals. Projections beyond 2025-26 are not available.
Effect on |Gross change
expenditure | in additional
| pension
| expenditure
| at constant
| 1989-90
| prices
| £ million
| (saving)
---------------------------------------------
1991-92 |nil
1992-93 |10
1993-94 |30
1995-96 |120
2000-01 |475
2005-06 |800
2010-11 |1,025
2015-16 |1,225
2020-21 |1,525
2025-26 |1,825
These are gross savings in additional pension expenditure before offsetting adjustments to invalidity allowance and income-related benefits. I shall write to the hon. Member enclosing estimates isolating the effect of invalidity allowance when these are available.
Mr. Alfred Morris : To ask the Secretary of State for Social Security what is his estimate of the expenditure on the additional component to invalidity pension that would be incurred in each of the next 20 years (a) under pre-1986 legislation, (b) under current legislation and (c) under the proposals in "The Way Ahead" ; and if he will make a statement.
Mr. Scott : (a) Information on additional pension expenditure under pre-1986 legislation is not available and could be provided only at disproportionate cost.
(b) and (c) Projections of expenditure under current legislation and under the proposals in "The Way Ahead" (Cm. 917) are as follows. These estimates are subject to considerable margins of uncertainty, particularly in the longer term. Since the precision implied by annual estimates would therefore be spurious, the long-term projections are given at five-year intervals.
Projected expenditure on invalidity benefit
additional pension at
constant 1989-90 prices
£ million
|(b) |(a)
|current |Cm. 917
|legislation|proposals
------------------------------------------------
1990-91 |565 |565
1991-92 |690 |690
1992-93 |820 |810
1993-94 |950 |920
1995-96 |1,225 |1,100
2000-01 |1,850 |1,375
2005-06 |2,125 |1,325
2010-11 |2,225 |1,200
2015-16 |2,350 |1,125
The figures illustrating the effect of the proposals in "The Way Ahead" show the gross effect on expenditure. The net effect on social security spending will be less because of offsetting changes in invalidity allowance and income-related benefits.
Column 485
Mr. Alfred Morris : To ask the Secretary of State for Social Security what is his estimate of the reduction in national insurance contributions consequent on the proposed abolition of additional component to invalidity pension ; and if he will make a statement.Mr. Scott : The level of contributions depends on the overall demands on the national insurance fund. The expenditure implications of the proposed change in invalidity benefit will be taken into account in determining future levels of contributions.
Disability Employment Credit
Mr. Alfred Morris : To ask the Secretary of State for Social Security (1) what account will be taken of other income in calculating entitlement to the proposed disability employment credit ; and if he will make a statement ;
(2) what account will be taken of the income of a spouse in calculating entitlement to the proposed disability employment credit ; and if he will make a statement.
Mr. Scott : The precise details of the new disability employment credit are still to be considered.
Community Care Grants
Mr. Wigley : To ask the Secretary of State for Social Security how many applications for community care grants were (a) met in full, (b) met in part, (c) dealt with by awarding a part-grant and part-loan, (d) dealt with by awarding a loan only and (e) refused for each month since January 1989.
Mr. Scott : Details of the numbers of community care grant applications, decisions, awards made and percentage refused are in the Library. The other information requested is not available and could be obtained only at disproportionate cost.
Crisis Loans
Mr. Wigley : To ask the Secretary of State for Social Security what proportion of income support claimants (a) were repaying a budgeting crisis loan from their benefit, (b) were repaying a budgeting crisis loan at 10 per cent. or more of their benefit and (c) were repaying a crisis loan at 15 per cent. or more of their benefit for each month since January 1989.
Mr. Scott : The number of loans being repaid on the last day of each month expressed as a percentage of national income support caseload is shown in the table. Information regarding the percentage rate at which loans were being repaid by individual applicants is not available and could be obtained only at disproportionate cost.
|Budgeting |Crisis loans |Caseload
| loans |(per cent.) |data used
|(per cent.)
----------------------------------------------------------------------
January 1989 |5.7 |0.9 |November 1988
February |6.1 |1.0}
March |6.5 |1.0} |February
April |6.9 |1.1}
May |7.5 |1.1}
June |7.8 |1.2} |May 1989
July |7.9 |1.2}
August |7.8 |1.1}
September |7.8 |1.1} |August 1989
October |7.9 |1.2}
November |8.0 |1.2}
December |7.9 |1.1} |November 1989
Overseas Pensioners
Mr. Skinner : To ask the Secretary of State for Social Security what arrangements are made by his Department to pay pensions to overseas beneficiaries ; what number of contracts exists for payment of United Kingdom pensioners resident overseas ; what schemes have been contracted out ; and how many countries are used for paying United Kingdom pensioners resident overseas.
Mr. Scott : There are approximately 530,000 British pensioners living overseas and the majority of these--some 400,000--are paid by direct payment into the pensioners' bank accounts. Under the terms of the social security convention between the United Kingdom and New Zealand the Department of Social Welfare there pays some 30,000 British pensioners on our behalf from funds transferred monthly to them for the purpose. The remaining pensioners are paid by means of sterling payable orders sent by post.
The contract for handling this post was awarded last year to DHL International (UK) Ltd. following a tendering exercise for which it submitted the lowest bid. The specification for the tender required delivery within a time span comparable with the delivery schedule quoted by Royal Mail, which also tendered. The performance achieved is being monitored. Generally DHL takes mail to various countries abroad and posts it through the domestic mail service there.
Pensions
Mr. Flynn : To ask the Secretary of State for Social Security what are the most recent estimates of (a) the number of people contracted out in personal pension schemes and money purchase occupational schemes, respectively, (b) the cost to the national insurance fund of the 2 per cent. inducement under sections 1 and 7, respectively, of the Social Security Act 1986 in each year up to 1990-91, and how much of this cost relates to contributions in respect of each year from 1987-88 onwards and (c) the total cost to the national insurance fund of personal pension schemes and money purchase occupational schemes, respectively, in each year up to 1990-91.
Mr. Scott [holding answer 12 January 1990] : I refer the hon. Member to appendix 7 of the report by the Government Actuary on the drafts of the Social Security Benefits Uprating Order 1990, and the Social Security (Contributions, Re-Rating) Order 1990 (Cm. 948) which was published yesterday. The number of people in contracted-out money purchase schemes is not known. Revenue forgone by the national insurance fund in 1988-89 in respect of personal pensions in 1987-88 was £289 million.
Mr. Flynn : To ask the Secretary of State for Social Security what information he has as to the sex and age distribution of persons contracting out by means of personal pension schemes.
Column 487
Mr. Scott [holding answer 12 January 1990] : The following information is based on a 1 per cent. sample of personal pension optants at a time when about 1.7 million applications had been processed. It relates to persons who paid some class 1 contributions for the year 1987-88 and who backdated a personal pension for that year. The table relates to the whole of the United Kingdom.
Column 488
Age |Male |Female
----------------------------------------
16 to 19 |121,300 |93,100
20 to 24 |309,000 |199,100
25 to 29 |271,700 |110,700
30 to 34 |125,200 |46,600
35 to 39 |184,100 |60,600
40 to 44 |138,100 |21,900
45 to 49 |4,800 |500
|------- |-------
Total |1,154,200|532,500
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