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House of Commons

Monday 5 February 1990

The House met at half-past Two o'clock


[Mr. Speaker-- in the Chair ]

Oral Answers to Questions



1. Mr. Vaz : To ask the Secretary of State for Social Security what additional support he is proposing to give pensioners in Britain.

The Parliamentary Under-Secretary of State for Social Security (Mrs. Gillian Shephard) : The Government attach a high priority to the needs of elderly people. The success of our policies resulted in a 23 per cent. real terms increase in average pensioners' total net income between 1979 and 1986.

Mr. Vaz : Nothing that the Minister has said will give any comfort to the millions of pensioners throughout the country who are struggling hard in difficult economic circumstances. What words of comfort has the Minister for a constituent of mine, Mrs. Houlton, a pensioner who has had to return to work as a part-time cleaner in order to pay for her television licence? Does the Minister agree that there is a strong case for her Department providing additional financial support to help pensioners pay for standing charges and television licences, which in many cases are essential for their entertainment?

Mrs. Shephard : The hon. Gentleman will know that concessionary licences for pensioners are a matter for my right hon. and learned Friend the Home Secretary. I remind the hon. Gentleman that our policies are aimed at improving the total income of pensioners. However, our measures of October 1989 directed an extra £200 million towards older, poorer and disabled pensioners. That resulted in help for some 2.6 million people, 100,000 of whom were given help for the first time through income support and housing benefit.

Miss Emma Nicholson : I welcome the Minister's statement on the rise in pensioners' incomes, but may I ask her to take particular care in considering pensioners who have worked and saved hard all their lives and who are living in their own homes and not receiving social security benefit? Many of them are living on less money than pensioners next door, who have not followed that course of action and are living on social security.

Mrs. Shephard : I recognise my hon. Friend's concern, but the Government consider that £8,000 as the capital

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limit for housing benefit and £6,000 as the capital limit for income support strike about the right balance between protecting less well-off people and the taxpayer.

Mrs. Mahon : Will the Minister consider giving support to pensioners who wear contact lenses because they have had cataract operations and who have to pay between £3 and £4 for lotions? Some of them need three or four lotions. Those lotions are not cosmetic but necessary aids. A pensioner who visited me last week was experiencing great difficulty. She had free prescriptions until 12 months ago but can no longer get them. It appears that they are discretionary and that discretion is not being exercised as it should.

Mrs. Shephard : As the hon. Lady knows, it is difficult for me to comment on an individual case. In certain circumstances help is available for prescriptions for people on low pay. I should be glad to look at the individual case if that would help the hon. Lady.

Pensioners (Income)

2. Mr. Shersby : To ask the Secretary of State for Social Security by how much pensioners' incomes from savings changed over the period (a) 1974 to 1979 and (b) 1979 to date.

18. Mr. Andrew Mitchell : To ask the Secretary of State for Social Security by how much pensioners' incomes from savings changed over the period (a) 1974 to 1979 and (b) 1979 to date.

The Secretary of State for Social Security (Mr. Tony Newton) : Between 1974 and 1979, pensioners' income from savings fell by 16 per cent. in real terms. Between 1979 and 1986, the latest year for which figures are available, it rose by 64 per cent. in real terms.

Mr. Shersby : Does my right hon. Friend agree that those figures demonstrate a massive increase in pensioners' income during the decade that the Conservatives have been in office, compared with when Labour was in office? Does he further agree that the unique benefit that accrues to British women, whereby they get a pension on their husband's contribution, and other related benefits, means that the British pension is one of the best in the European Community?

Mr. Newton : I endorse my hon. Friend's comments on both counts. The improvement in the income that pensioners derive from their savings has been an important ingredient in the overall increase in the total average net income of pensioners, to which my hon. Friend the Under-Secretary of State referred in her earlier reply. That has been accompanied by our measures to help those who do not have the advantage of income from savings -- [Interruption.] As to European comparisons, I see that hon. Members on the Opposition Front Bench are in characteristically simplistic mood. As emerged from my exchanges with the hon. Member for Oldham, West (Mr. Meacher) in the debate last week, many European countries do not pay married women a pension on their husband's contribution. It is a major advantage of the British system that it does.

Mr. Andrew Mitchell : Although most pensioners have done quite well under the present Government, and certainly a great deal better than they did under the

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previous Labour Government, is it not the case that one group has done much less well? I refer to those who must exist only on a state pension. Were not the Government absolutely right last year to introduce their package for poorer pensioners, which was specifically targeted at that group?

Mr. Newton : Yes. Our policy specifically acknowledges that not all pensioners have the advantage of increased occupational pensions and of the improved income from savings to which I referred. We deliberately sought to direct extra help to those most in need.

Mr. Frank Field : Although the Secretary of State clearly has no difficulty in confusing some of his supporters about what has really happened to pensioners' living standards, does not the right hon. Gentleman agree that most pensioners know that under the previous Labour Government, those among them dependent on state benefits enjoyed a real increase in their pension of 20 per cent., compared with only 2 per cent. under the present Government?

Mr. Newton : In recent weeks, the hon. Gentleman and I have had several exchanges about that. As I have adverted to on more than one occasion, the hon. Gentleman himself recently wrote an interesting press article in which he acknowledged precisely the type of points that I made in my previous answer, and suggested that his own party's policies did not focus sufficiently on the needs of pensioners whose only income was a state pension.

Mr. Meacher : The right hon. Gentleman constantly makes great play of the increase in pensioners' real overall incomes over the past decade. Will he confirm that the poorest one fifth of pensioners have received no real increase over the past decade? As to the remainder, will he further confirm that the two biggest factors in increasing their incomes have been high interest rates--which increase the return on investments, but at the expense of mortgage misery for millions--and, above all, the maturing of the state earnings-related pension scheme, which was a Labour Government scheme that the right hon. Gentleman's predecessor tried to destroy?

Mr. Newton : I cannot confirm the latter. The two most striking features have been the growth in income from occupational pensions and the growth in savings income, which compares with a decline in savings income under the previous Labour Government. As to the hon. Gentleman's first point, it has been emphasised frequently in recent debates that far fewer pensioners are now in the bottom one fifth of income distribution. That figure has fallen from 38 per cent. in 1979 to 24 per cent. now.

Long-term Disablement

3. Mr. Boswell : To ask the Secretary of State for Social Security if he will make a further statement on the measures he is introducing to help long-term sick and disabled people who are disabled from birth or early in life.

The Minister for Social Security (Mr. Nicholas Scott) : On 10 January, my right hon. Friend the Secretary of State for Social Security announced major improvements in social security help for people disabled from birth or in early life. Our proposals include increasing severe

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disablement allowance for nearly 25,000 disabled people later this year ; a new disability allowance for people of working age and below, to improve help with the extra costs of being disabled ; and a new disability employment credit to make it easier for disabled people to take up jobs.

Mr. Boswell : Will my right hon. Friend confirm that the cost of providing those benefits to the long-term sick and disabled, at more than £8 billion, is now twice what it was in real terms 10 years ago? Will he further confirm that the measures taken last October and in January were targeted at those vulnerable groups? Will he give an assurance that he will continue working with our right hon. Friend the Secretary of State and our hon. Friend the Under-Secretary to ensure that improvements are achieved for those vulnerable groups and that progress is made towards an effective disablement income for those unable to earn for themselves?

Mr. Scott : I confirm that my hon. Friend is correct to suggest that there has been a real terms increase of virtually 100 per cent. in expenditure on the long-term sick and disabled, which is projected to rise to some £12 billion by the end of the century. I believe that those proposals are well targeted and, as I said in my answer, they will be of particular help to those who are disabled earlier in life, and who do not have an opportunity to build up a contributions record, an occupational pension or savings. We shall continue to monitor the system, to see what improvements may be made in the future.

Mr. Alfred Morris : What are the Government's plans for very severely disabled people with high care costs, and for the more than 4 million pensioners who are disabled? Can the Minister assure the House that existing benefit levels will be protected for attendance allowance and mobility allowance claimants? Is he aware that all the main national organisations have now combined to condemn as disgraceful Ministers' response to the poverty uncovered by the Government's own surveys of disability?

Mr. Scott : There has been a real increase in the level and extent of benefits since the Government came to office. I acknowledge that the role of carers--those who care for the disabled--will come under increasing scrutiny as time goes by, but through increasing earnings disregard, invalid care allowance and the introduction of the carer's premium, we have recognised that. Of course, we shall continue to uprate the higher level components for both care and mobility in the disabled allowance, and that will extend its coverage further down the scale of disability.


4. Mr. David Evans : To ask the Secretary of State for Social Security what estimate he has as to the number of pensioners who are benefiting as a result of the abolition of the pensioners' earnings rule.

Mr. Newton : We estimate that when the earnings rule was abolished, up to 400,000 stood to benefit immediately. In addition, all future pensioners will benefit from the freedom to choose to continue in work and receive their state pensions.

Mr. Evans : I welcome my right hon. Friend's good news, which shows the Conservatives' commitment to pensioners. Notwithstanding what the Opposition say,

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pensioners incomes have increased by 25 per cent. Now that pensioners have the choice to carry on working, will my right hon. Friend ensure that all pensioners everywhere know of the change so that they can carry on working if they wish?

Mr. Newton : We mounted a substantial exercise last year to tell those whom we thought might be affected. Information about the abolition of the earnings rule is part of the standard pack that we send to new and prospective pensioners.

Mr. Madden : May I ask the Secretary of State a simple question on behalf of a widow pensioner constituent? Could he live on £46.20 per week? That is the amount that she is expected to live on. She asked the Prime Minister the same question on 8 November last year and has not so far received a reply.

Mr. Newton : The hon. Gentleman will realise that I need more details. In particular, I need to know whether the figure that he quotes includes housing benefit, because in many cases, the figures used to describe people's social security incomes totally ignore the help that they get with housing costs.

Mr. Hind : The abolition of the earnings rule for pensioners will be a relief, but the introduction of the community charge will cause a great deal of hardship to some pensioners, particularly those who receive a small pension. Will my right hon. Friend study the situation in relation to housing benefit and see whether he can assist? In Lancashire we are faced with a 16 per cent. increase in expenditure by the Labour-controlled Lancashire county council, which will mean an extra £300 on the community charge. The Government's calculated level of £264 means that there will be no relief on the extra £300 that many households will have to pay.

Mr. Newton : I cannot undertake completely to offset the effects of irresponsible expenditure policies by Labour local authorities. Community charge benefit, which is now replacing rate rebates, is more generous because it has a lower taper rate, and I hope that that will help some of my hon. Friend's constituents.

Social Fund

5. Rev. Martin Smyth : To ask the Secretary of State for Social Security what proportion of low and medium-priority claimants to social fund offices he expects to receive social fund grants in the final quarter of the current financial year ; and what guidance has been issued by his Department to local offices.

Mr. Scott : Applications for social fund loans and grants are decided by social fund officers exercising their discretion having regard to the individual circumstances of the particular application. It is not therefore possible to estimate the proportion of low and medium-priority applications that will be met during the remainder of this financial year. Guidance to social fund officers is contained in the social fund manual, a copy of which is in the Library.

Rev. Martin Smyth : I welcome the news that 100 social fund offices have been extra money to deal with some of the claims. Is it not a fact, however, that some offices are

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instructing officers to consider only higher -priority groups? Is not some flexibility required, especially in view of the recent adverse weather conditions?

Mr. Scott : Some offices are in that position, but others are still able to pay claimants at all levels of priority. We shall be monitoring the position very carefully, and we have shown that we are already doing that by increasing the number of officers to 106, at an extra cost of some £3 million.

Mr. Flynn : The Minister mentioned a responsible spending policy, but he need not look beyond the social fund to see what everyone else has recognised--that it is a fraudulent fiasco. Those in the greatest need are excluded altogether because of the loans demand, and many others may not receive any grant at all : it is a question of luck and of where they live, because it depends on how much is left in the local budget. Many offices have had to exclude whole categories of claimants from the scheme because their budgets are too low. In the face of soaring demands, inconsistencies, chaos and injustices, how can the Minister plan to cut next year's social fund in real terms?

Mr. Scott : We shall announce the allocations for next year in due course. I am confident that the social fund is a considerable improvement on the single payments system that preceded it ; it contains some flexibility, perhaps best illustrated by the fact that, of the loans that have been refused this year, no fewer than 25,000 have been met by an award of community care grant.

Departmental Service

6. Mr. Burns : To ask the Secretary of State for Social Security what assessment he has made of recent improvements in the speed of service provided by his Department ; and to what he attributes such improvements.

20. Sir John Hunt : To ask the Secretary of State for Social Security what assessment he has made of recent improvements in the speed of service provided by his Department ; and to what he attributes such improvements.

Mrs. Gillian Shephard : With permission, Mr. Speaker, I should like to answer question 6 together with question 20.

Ms. Short : No. That is outrageous.

Mr. Speaker : Order. It is a matter for the Minister ; questions are sometimes linked in this way, although it is unusual.

Mrs. Shephard : Since the Government reforms were introduced in 1988, the social security system has become simpler for claimants to understand and easier for staff to operate. As a result, there have been very real all-round improvements in standards of service to the public. In 1989-90, the average time taken to clear income support claims, and the average time that income support callers spend in our offices, have both improved by 24 per cent. compared with average processing and waiting times before the reforms.

Mr. Burns : My hon. Friend's answer will be warmly welcomed throughout the country. May I, however, draw to her attention a problem of which I have been informed

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by the Chelmsford Children's Society? A Catch-22 has developed. The problem of homelessness has been accentuated because of the time that elapses between the submission of an application for housing benefit and the receipt of the benefit, because it takes so long to process an application. Can my hon. Friend's Department do anything to speed up the process and eliminate the problem?

Mrs. Shephard : I think that my hon. Friend will know that the administration of housing benefit is the responsibility of local housing authorities, which are expected to clear housing benefit claims within 14 days. The undue delay that my hon. Friend mentions should not take place. It is unacceptable that housing authorities should prevent vulnerable groups from receiving money made available to them by the Government.

Sir John Hunt : To what extent is the welcome improvement in clearance times due to the operation of the Freeline service that is being increasingly used, particularly by those who find it difficult to put their problems into writing? Has not that been a helpful innovation?

Mrs. Shephard : I agree with my hon. Friend. The Freeline service now receives 1 million calls a year. That includes a service in a number of ethnic languages.

Mr. Robert Hughes : Does not the Minister realise the humiliation that her Department is heaping upon claimants for both mobility allowance and attendance allowance? The position of many of them will not improve. However, renewal of their benefit seems automatically to be refused. They have to wait months for their appeal to be heard and sometimes they have to go much further than that before their just demands are met. There is no point in saying that the time taken has improved. Their humiliation now is much greater.

Mrs. Shephard : I refer the hon. Gentleman to the fact that there has been a considerable improvement in waiting times for administering those benefits. I shall give him the details of those improvements if he cares to write to me.

Mr. Pike : Is not the Minister concerned about the great poverty and difficulty that many people suffer due to the time that it takes to hear appeals? That may not be the responsibility of her Department, but will she exert every pressure to ensure that appeals relating to all forms of benefit are dealt with as speedily as possible?

Mrs. Shephard : The hon. Gentleman is right when he says that the time taken before appeals can be heard and settled causes great distress to claimants. We shall continue to review any improvements that it might be possible to make.

Children (Benefits)

7. Mr. Knox : To ask the Secretary of State for Social Security what is his estimate of the percentage of take-up of means-tested benefits for children ; and what is the percentage take-up of child benefit.

Mr. Newton : We estimate that, overall, around 90 per cent., by value, of income-related benefits are claimed, and that nearly four out of five families with children eligible for income-related benefits make a claim. Take-up of child benefit is virtually 100 per cent.

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Mr. Knox : As the take-up of child benefit is higher than the take- up of means-tested benefit, does not my right hon. Friend agree that many poorer families with children are suffering because of the failure to uprate child benefit?

Mr. Newton : No, I do not think that I would. It would be impracticable, at least in my judgment, to raise child benefit to a level that would give the same amount of help to low-income working families as is given by family credit. To that extent, whatever the level of child benefit, we should need a benefit such as family credit. We are determined to make it as effective as possible.

Ms. Short : Surely the question is whether the Government wish to help children and to encourage mothers who wish to work to do so. If that were the Government's intention, they would increase child benefit. Instead, they have cut it and given away the money in tax cuts to the rich. That is forcing large numbers of people, women in particular, to live on benefits when they would like to work. That is the result of the cut in child benefit and it is the Government's deliberate policy.

Mr. Newton : As the hon. Lady knows, I simply do not agree with her. The fact is that family credit encourages a large number of families, both the mothers and the fathers, to work when circumstances might otherwise discourage them from doing so. Help is being given to 50 per cent. more people at very nearly twice the cost of the previous benefit.

Long-term Disablement

8. Mr. Hague : To ask the Secretary of State for Social Security by what proportion spending on benefits for long-term sick and disabled people has increased over the last decade ; and how he anticipates recent announcements will affect such expenditure over the next three years.

Mr. Scott : We have increased spending on benefits for people who are long-term sick or disabled by almost 100 per cent. over the past decade. The improvements in help for disabled people that my right hon. Friend the Secretary of State for Social Security announced on 10 January will increase spending by an extra £88 million net in 1990-91, £141 million net in 1991-92 and £214 million net in 1992-93.

Mr. Hague : Does my right hon. Friend agree that his answer demonstrates a powerful commitment over the past 10 years to give more help to those to whom the taxpayer is most anxious that help should be given? Will he take this opportunity to emphasise the Government's continuing desire to give more help and to improve the benefits for sick and disabled people, which can happen only in a successful, free enterprise economy?

Mr. Scott : We have clearly demonstrated our commitment by increasing expenditure in real terms every year by £370 million during our period in office, as against £220 million under the Labour Government, using the same basis for those figures. We are not resting on our laurels. Additional money will be spent every year on the long-term sick and disabled for the rest of this century.

Mr. Meacher : Will the Minister confirm that the extra expenditure on disabled people which arises from the Secretary of State's recent announcement will peak in three years' time at £300 million a year but will fall steadily

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over the rest of the decade to nil? Will he further confirm that Government figures show that his recent announcement will massively cut benefits to disabled people by £9 billion each year over the next 25 years? Is not this yet another notorious example of the Government cutting the incomes of the most vulnerable sections of society to fund tax cuts for the rich?

Mr. Scott : To reiterate what the hon. Gentleman does not seem to have grasped, there will be extra money each year for the rest of the decade--

Mr Meacher : And after that?

Mr. Scott : That is a long time ahead. We have altered the balance and structure of benefits especially to help those who are disabled early in life or from birth and we have acquired some freedom for manoeuvre in the long term. The country will judge our record of improving benefits for disabled people against that of the previous Labour Government.

Sir Anthony Grant : I congratulate my right hon. Friend on the good work that he has done while he has held his present responsibilities, but will he give an assurance that in future expenditure the needs of sufferers from multiple sclerosis and motor neurone disease, which are the concern of dedicated societies in Cambridge, will be given the consideration that they deserve?

Mr. Scott : Those who suffer from motor neurone disease will be one of the principal groups who will benefit from clause 1 of the Social Security Bill, which is currently making slow progress through the House. Both the groups that my hon. Friend mentioned are likely to benefit from the age-related additions to severe disability allowance and from the disability allowance that we shall introduce in due course.

Nursing Homes

11. Mr. Andrew Bowden : To ask the Secretary of State for Social Security what representations he has received concerning the cost of providing care in voluntary and private residential nursing homes in the south-east of England.

Mrs. Gillian Shephard : We have received a considerable number of representations from a variety of interested organisations and individuals, including hon. Members.

Mr. Bowden : Does my hon. Friend agree that prices in the south-east are inevitably higher than in many parts of the country, and that as a result of the level of maximum payments set by the DSS some people who are unable to afford those prices are being forced out of residential homes and back into hospital? That cannot be good for the National Health Service or for the individuals concerned.

Mrs. Shephard : I remind my hon. Friend that the help provided over the past 10 years through income support has helped many thousands of people to make their own choices about the residential care that they want. It has never been the intention of the Government, nor could it be of any Government, to meet all residential care costs, no matter how high. We have provided an additional £100 million for 1990, thereby increasing the help available for about 200,000 people. Obviously, the system is not perfect,

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which is why the proposals in the National Health Service and Community Care Bill deserve my hon. Friend's careful consideration.

Mr. Eastham : Has the Minister had a chance to read correspondence that I sent to the Department on behalf of the citizens advice bureau operating in the Manchester area? It pointed out that the money given by the Government is inadequate to support old people in residential homes, to the extent that their pocket money is being used to make up the deficit. When will the Government introduce a realistic figure and realise that the northern areas suffer as much as the southern counties?

Mrs. Shephard : I must repeat that, with effect from April, the Government will make available an additional £100 million. That will mean a £10 increase for all claimants in residential homes, except for the mentally ill. But, because the system is not perfect, changes are on the way.

Pensioners (Income)

12. Sir George Young : To ask the Secretary of State for Social Security by how much pensioners' incomes from occupational pensions have risen since 1979.

16. Sir Trevor Skeet : To ask the Secretary of State for Social Security by how much pensioners' incomes from occupational pensions have risen since 1979.

Mr. Newton : With permission, Mr. Speaker, and I hope without the previous opposition, I will answer question 12 together with question 16.

Between 1979 and 1986 pensioners received a 56 per cent. real increase in income from their occupational pensions.

Sir George Young : Is not it increasingly irrelevant to use the level of the state retirement pension as a barometer for the living standards of pensioners? Will my right hon. Friend consider publishing regularly, alongside average industrial earnings, the average incomes of pensioners?

Mr. Newton : I shall certainly consider my hon. Friend's suggestion, because the first part of his supplementary question is absolutely right. It is increasingly important to consider what is happening to pensioners' incomes as a whole. On average, the increase has been substantial.

Sir Trevor Skeet : The important consideration is the real percentage increase in the total earnings of pensioners, as Ministers have said, and although the number of occupational pensions has increased greatly over the years--thanks to the Conservatives--will my right hon. Friend bear in mind the fact that a small section of the public still depend on state pensions only and that they are being crushed under their burdens?

Mr. Newton : We have very much borne that in mind. As one of my hon. Friends said, it is precisely for that reason that about £200 million of additional state money was steered through the income support and housing benefit system to those least well-off pensioners as recently as last October.

Mr. Kirkwood : Does the Secretary of State recognise that those pensioners are struggling? Does he agree that it would be wrong to accept the suggestion of the hon. Member for Ealing, Acton (Sir G. Young) that the average

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incomes of people on occupational pensions should be used to determine Government policy? As has been said before, the people who are suffering are those who have to live on the state pension and nothing else.

Mr. Newton : That was not what my hon. Friend the Member for Ealing, Acton suggested, and it was certainly not what I agreed with. The income of pensioners is an important and relevant fact in judging the balance of public policy. It is one of the things that led us to believe that it was right to make special increases for the least well-off pensioners, using the state's resources.

Mr. Winnick : How does the Minister explain the position of pensioners who have written to me, some of whom have a total income of no more than £54 a week, out of which they pay £10 or £12 a week in council rents? Councils have told me that they have no alternative but to charge such rents because of the Government's policy on housing benefit. Why should constituents on small incomes, such as those to whom my hon. Friend the Member for Bradford, West (Mr. Madden) and I have referred, have to live lives of poverty and deprivation largely because of the Government's policy on pensions and housing benefits?

Mr. Newton : The pensioners to whom the hon. Gentleman referred are precisely those who benefited principally from the Government's measures last October in respect of income support and housing benefit. That was the right thing to do.

Mr. Favell : If one talks about a pensioner living on the basic pension alone, it sounds as though he is poor. Is it not a fact, however, that a person on the basic pension who has no occupational pension and no savings is entitled as of right to income support and to housing benefit if he needs help towards the costs of his accommodation?

Mr. Newton : Yes. A pensioner who had only the basic state retirement pension would certainly, unless he were living in someone else's household, be helped by income support and housing benefit.

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