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'provides information regarding caring activity within a specified time which will be no less than six years following the year in which the qualifying caring activity took place.'.
Mr. Burstow: To get the state second pension, carers must receive or have an underlying entitlement to invalid care allowance for the full 52 weeks of the year. ICA rules mean that many carers lose entitlement for some weeks of the year. In the past, that meant that a week's benefit was lost. Under the state second pension, it means that a whole year's contribution will also be lost.
Carers can, in theory, get eight weeks of respite care under the current rules. Many place great value on that, but, as we all know from talking to carers in our constituencies, it can be very difficult for them to schedule their lives to avoid the linking rules that disqualify them from entitlement to invalid care allowance. They also have to bear in mind that if the person whom they are caring for is admitted to hospital unexpectedly, their eligibility and entitlement to invalid care allowance will also be jeopardised, thus risking the loss of a whole year's contribution to the state second pension.
Respite care is not the only area in which the rules could affect contributions to the state second pension. Many carers may value part-time work and see it as a further way of getting some respite and some connection to the wider community. However, particularly since the introduction of the minimum wage, it is difficult for people to earn below the £50 earnings rule limit. Even those who earn below that level can find that a Christmas
bonus or other bonuses push them above the earnings limit. That can result in them losing not just a week's invalid care allowance, but their entitlement to a whole year's contribution to the state second pension.
Amendment No. 12 would enable carers to combine weeks of ICA with weeks of earnings over the lower earnings limit. It would help those who do not get ICA throughout the year and have periods when they are able to work but do not reach the lower earnings limit. For example, people receiving ICA for 40 weeks and earning £100 in each of the other 12 weeks would not get a year's credit for the state second pension, as their earnings would have been below the lower earnings limit and they did not get ICA for the whole year.
The Minister rightly said that the Government wanted to help the lowest earners in our country, but the way in which the scheme is constructed will make that impossible. We cannot help the real lowest earners unless we can fix the problem.
Amendment No. 11 concerns home responsibilities protection. The Government propose to change the qualification period, so that within three years of the entitlement to a benefit lapsing, if people have not made their declarations to the relevant authorities, they will lose the protection. At present, with the basic state pension, people can still claim after 15 or 20 years or more.
The Government are changing the requirement to allow only three years for both the basic state pension and the state second pension. We feel that that is not long enough to be fair, and that it would be better to align the change with other practice. For example, voluntary class 3 payments have to be paid before the sixth tax year after the one in which they were due and the time limit for claiming back overpaid tax or tax allowances is also six years.
The Government are concerned that people will not be able to remember the details of their periods of caring and eligibility for ICA. If that were the case, surely the same would apply with those two tax measures. We are arguing for consistency of approach in different legislation to the requirement for people to give notice of their entitlement.
We do not deny that the Government are making improvements for carers through the state second pension, but using eligibility for the invalid care allowance, which is very badly constructed, as the basis for entitlement to credits for the state second pension means that many carers will not get the credits that they deserve as a recognition for their many hours and years of caring.
Mrs. Lait:
In the interests of brevity, I shall speak only to amendment No. 65. We discussed at length in
It is not often that the Conservative party joins those who voted just now on the basic state pension, but on this occasion we have tabled similar amendments: indeed, in Committee, we tabled an amendment to allow women to continue to be able to receive credits in respect of children under the age of 11.
Dr. Lynne Jones:
I am pleased that the hon. Lady supports extending credits to carers of older children, but, last week, the hon. Member for Buckingham (Mr. Bercow) advocated that lone parents with children should be forced to work and should have their benefits cut if they did not go to work. Will she dissociate herself from those comments?
Mrs. Lait:
All I would do is point out that it is the hon. Lady's Government who are cutting credits at the age of six, whereas we had arranged that women be credited for SERPS in respect of children up to the age 16, so I do not think that there is much of a point to be made out of that.
May we concentrate on the arguments for ensuring that women with children under the age 11 or 12 receive credits with regard to home responsibility payments? That may help us to move on speedily.
The reason why we have worked on the basis of 11 or 12 is that that is the age at which children break from primary school and go to secondary school. That is when their school hours tend to get longer and their mothers feel freer to go to work. It is interesting that labour market trends show that the bulk of women start working full-time when their children are aged 11-plus.
One of the purposes of our amendment is to ensure that women who have career breaks have the best possible chance of building their pension. We want to help them and to ensure they have the choice of staying at home to look after children until they are at school full-time and are more independent. That is why we have tabled the amendment to extend credits to the age of 12.
Dr. Lynne Jones:
Amendment No. 68 credits carers of school-age children up to the age of 11 for the state second pension. As I have established, the real purpose of the state second pension is more to fill the gap left by the failure to uprate the basic state pension in line with earnings than to replace SERPS. In judging the Bill's adequacy in respect of giving credits for non-earners, the appropriate yardstick should be the groups who are credited for the basic state pension.
A parent who receives child benefit is credited with home responsibilities protection, which reduces the years required to qualify for the basic state pension. The Bill requires that the child must be under six for the carer to qualify for state second pension carer credits, but, even after the children go to school, the demands placed on a carer, especially in a child's early years or where there are a number of young children in a family, often preclude a return to work. If work is possible, it is often part-time and on earnings that fall beneath the lower earnings threshold. Therefore, the carer would not automatically qualify for credits for the state second pension.
That is particularly the case for lone-parent families. It is relevant that some Conservative Members seem to be advocating that lone parents should return to work if they have children of school age.
The Government have patted themselves on the back for the extra help that they have given to carers to be credited into the state second pension. I hope that my hon. Friend the Minister, when she responds to the debate, will explain the logic of not including the carers of children of primary school age.
Angela Eagle:
In considering the amendments, we must bear in mind the huge gains that the introduction of the second state pension will bring for carers and the low-paid. About 18 million people will gain from the provisions: 9.5 million will be moderate earners; 4.5 million will be low earners; 2 million will be disabled people; and 2 million will be carers.
For the first time ever, the Bill provides that carers without a work record will have access to an additional pension. If they have a lifetime of caring, the Bill will give them access, for the first time, to additional pension provision. With that in mind, I shall deal with the amendments in this group.
Amendment No. 11 would extend from three years to six the time within which caring activity must be reported to the Department in order to qualify for credits for the second state pension. Home responsibilities protection at present protects the basic pension provision of someone caring for a child or for a sick or disabled person. It is not a credit or benefit in its own right.
As my hon. Friend the Member for Birmingham, Selly Oak (Dr. Jones) pointed out, the protection works by reducing the number of qualifying years needed for full basic pension. Therefore, a person still has to work for many years, and many carers do not qualify for the benefits of home responsibilities protection because of the structure of the old system. The hon. Member for Sutton and Cheam (Mr. Burstow) might have had the grace to recognise that the second state pension will be a hugely beneficial development for those people. The hon. Gentleman both nit-picked around the edge of the argument and raised some serious issues, but he might have pointed that out.
Many child benefit recipients get home responsibilities protection automatically. Others need to complete a form to notify the Department of periods of caring activity that qualify. That can be done at any time after the period of caring. Given that home responsibility protection began in 1978, we could theoretically be asking people to provide information up to 49 years after the period of caring in question.
As the new home responsibilities protection for the second state pension is worth so much more in benefit--it will be as if an extra £9,500 had been earned, so it will be a big earnings boost--it seems prudent to make the system more sensible. Accordingly, we are to ask people to report to us the years in which they were caring.
We believe that three years is a reasonable interval in which a person may report caring activity, but the amendment suggests six. It is important that we can be confident that notifications are given using correct information. We do not believe it reasonable to expect carers to remember the number of hours of caring that
they undertook during a period of time more than 20 years previously. We therefore consider record-keeping to be important.
In addition, our aim of ensuring that as many carers as possible benefit from the additional pension provision under the second state pension means that we are proposing to keep the limits tight. We have decided that three years is the optimum period. That means that people who care throughout 2003-04 will need to have notified the Department by 5 April 2007 that they were caring in that period. If carers want to provide the information at the end of a year of caring rather than three years later, they will be free to do so.
The provision will not be retrospective, so people who have been caring in 1999-2000 will be able to notify the Department at the point of retirement under the old system, for the purposes of protecting their basic pension entitlement. In order to ensure that the change is implemented smoothly, we will provide advanced warning for those who may be affected, especially existing carers. We intend to mount a publicity campaign to reach carers in advance of the introduction of the second state pension, and we hope to make many more pensioners aware of home responsibilities protection than are aware of it at present.
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