Select Committee on Social Security Third Report


Funeral Payments

    (a)  Whilst we accept that there have been many changes to the Benefit system since 1997 which have taken priority, we believe that reform of Funeral Payments is long overdue and recommend that the Government increases the amount available to claimants for Funeral Payments to a more realistic total, reflecting the current charges for a funeral and that steps should be taken to ensure that the amount is reviewed annually to reflect increases in funeral costs. (Paragraph 12)

    (b)  We recommend that there should be greater flexibility in the rules governing eligibility for funeral payments, so that payments can be, for example, made to the parent of a deceased child, or to a close relative or close friend if it is reasonable to do so. The question of reasonableness should be decided at the discretion of the decision-maker, subject to guidance (as opposed to inflexible rules laid down in regulations as now); and with a right of appeal to a social security appeal tribunal on the exercise of that discretion. (Paragraph 13)

    (c)  In the case of applications from people who wish to bury the remains of the deceased overseas, we recommend that funeral payments (subject to the usual maxima applied to other funerals for which a Funeral Payment is available) should be allowed in respect of funeral costs (or equivalent religious observance) which are incurred in the UK, prior to transportation overseas. (Paragraph 14)

Winter Fuel Payments

    (d)  If the arrangements for Winter Fuel Payments are changed in the future to a more targeted benefit we will expect the fuel poor in other groups to be included. The element of benefits which is intended to cover fuel costs, to which the Minister referred in her evidence to the Committee, should keep pace with any increase in the cost of heating generally. (Paragraph 17)

Community Care Grants

    (e)  We recommend that the Department should commission research to re-examine the basis on which the Community Care Grant budget is currently allocated to local offices, including the relative weightings given to different client groups; the current accuracy of caseload measurement; and the accuracy of measurement of 'legitimate demand'. (Paragraph 38)

    (f)  We recommend that claimants should be given sufficient information to enable them to have a reasonable expectation of what is or is not classed as a priority. (Paragraph 43)

    (g)  We recommend that, failing more fundamental reform, the Community Care Grant budget should be raised substantially to a level which ensures that all applications which are classed as high and medium priority are met to the full amount required. (Paragraph 44)

Budgeting Loans

    (h)  We recommend that better information be made available to applicants, to increase their awareness of their credit limit and the chances of an additional loan application being successful. (Paragraph 55)

Crisis Loans

    (i)  We recommend that the annual percentage of Crisis Loans paid for "alignment" (37.3% in 1999-2000) is analysed in order to assess the underlying problems leading to the need for those Crisis Loans, how the causes could be addressed and that the results be published by the Secretary of State in the annual report to Parliament. (Paragraph 64)

    (j)  We recommend that the direction dealing with eligibility criteria for Crisis Loans be reviewed in order to increase access to Crisis Loans when applications for Budgeting Loans have been refused. (Paragraph 67)

Repayment and Rescheduling of Loans

    (k)  We consider that the level of repayments and the repayment period should be much more flexible in order to minimise the hardship which claimants experience and to avoid them encumbering themselves with further high-priced debt. (Paragraph 71)

    (l)  We recognise that if the payment period was extended, in order to sustain the current level of loans, the budget would have to be increased. But we consider that, because the loans would still have be repaid, there would be hardly any increase in net expenditure in the long term. (Paragraph 71)

    (m)  We consider that Benefits Agency staff should be expected to draw the attention of applicants to the possibility of rescheduling loans both at the time of application and subsequently if it becomes clear that the claimant is suffering additional hardship as a result of their Social Fund loan repayments. We recommend that Benefits Agency staff be so instructed. The possibility of rescheduling should also be more prominently displayed in publicity material and on application forms. (Paragraph 73)

Administration of the Discretionary Social Fund

    (n)  We recommend that a rule be introduced that, if it is later shown that a person who has applied for a Budgeting Loan would have been eligible for a Community Care Grant in respect of the same need if he or she had been correctly advised at the time, a decision to award a Community Care Grant should be substituted and if a Budgeting Loan has been granted, the debt should be written off. (Paragraph 78)

    (o)  It has become quite clear to us that Social Fund applicants need more active and informed assistance from Benefits Agency staff both in accessing appropriate Social Fund payments and in dealing with their benefits more generally at a disruptive period of their lives. We would like to see better trained staff working directly and intensively with Social Fund claimants for short periods, acting as 'champions' to assist them in accessing the benefit help they need. (Paragraph 85)

    (p)  We recommend that claimants should be able to telephone for an estimate, which should be logged, of how much they are likely to receive by way of a Budgeting Loan before an application is submitted, and secondly, that more information is given to applicants to explain a decision which has been made. (Paragraph 87)

    (q)  We recommend that the Department use the opportunity offered by IT modernisation to work towards a system where Social Fund customers are sent statements of account at the start of a loan, and then at six monthly intervals thereafter until the loan is repaid - showing the repayments made to date; the amount of the loan still outstanding; and the expected date when the loan will be repaid. The opportunity should also be taken to remind customers at regular intervals of the opportunity to reschedule their loans if they are experiencing financial difficulties. (Paragraph 88)

    (r)  We recommend that consideration be given to a review of the grades and training of the staff within the BA who deal with Social Fund claimants, in order that their expertise can be retained and channelled to provide active and informed assistance to the maximum benefit of claimants. (Paragraph 94)

    (s)  We recommend that the Department take more active steps to monitor the quality of service being provided to its Social Fund customers, by funding qualitative research; by customer surveys; and by more active liaison with welfare rights organisations. (Paragraph 99)

    (t)  We think there is a case for ethnic monitoring of Social Fund applicants. (Paragraph 100)

    (u)  We therefore recommend that a pilot programme should be set up by the Department of Social Security, in consultation with the Commission on Racial Equality, aimed at trialling a system of ethnic monitoring of Social Fund applicants. (Paragraph 100)

    (v)  We will expect to see a significant reduction in administrative errors. The increase of data-matching should make it possible for all claimants to receive the benefits to which they are entitled and better information should be made available to applicants in the form of detailed reasons for a refusal and a clear statement of the amount, repayment terms and period for successful applications. (Paragraph 102)

Reviews and Appeals

    (w)  We recommend that the Secretary of State sets a target time for the handling of internal Social Fund reviews of a maximum of two weeks and publishes figures in the Annual Report on the Social Fund indicating both the performance of offices against this target, and the average waiting time experienced by claimants awaiting an internal Social Fund review. (Paragraph 105)

    (x)  We recommend that applicants to the Social Fund should be able to apply directly to the IRS for a review of their case, rather than going through the Benefits Agency. (Paragraph 106)

    (y)  We recommend that the contingency plans referred to by Sir Richard should now be taken forward in order to make the Independent Review Service compliant with the Human Rights Act and to provide assurance to claimants and others that a review of their Social Fund claim is truly and visibly impartial. (Paragraph 108)

Organisational Change

    (z)  We recommend that claimants should continue to be able to claim Social Fund payments through the same offices where they claim Income Support or income-related Jobseeker's Allowance, not least so they can benefit from the assistance of a Personal Adviser once the use of such staff becomes widespread. (Paragraph 110)

Options for the Future

    (aa)  We repeat the recommendations first made in our report on Integrated Child Credit, that the Government should establish a specific budget to fund research into the levels of income needed to avoid poverty; and that it should set up a working party involving policy makers, academics and other interested parties to assist the Government to devise publicly acceptable measures of such levels. (Paragraph 114)

    (bb)  We recommend that the Government review both the overall budget for grants within the Social Fund system and the eligibility criteria to overcome these weaknesses and to ensure consistency. (Paragraph 115)

    (cc)  Whilst it is clear that people on the lowest incomes struggle to repay even interest-free loans from weekly benefit, there does appear to be the potential for the role of the Social Fund to be expanded to a wider group of people, offering interest-free loans to people excluded from normal credit markets. (Paragraph 116)

    (dd)  It appears that little has been done so far by the DSS to take forward the recommendations of the PAT 14 report. We welcome the Minister's commitment to do so and recommend that this is done as a matter of urgency. (Paragraph 116)


    (ee)  We urge the Government to use the opportunity offered by the re-organisation of DSS to take a radical look at the Social Fund, so that it may work to enhance the strategy to reduce child poverty, rather than work against it. (Paragraph 117)

    (ff)  At the start of the inquiry, we asked ourselves whether the Social Fund was achieving the aim set for it by past and present Governments. In particular, we asked whether it was helping the poorest and most vulnerable in our society. We have concluded that the scheme in its present format needs urgent overhaul and an injection of funds. Without such action, there is a strong possibility that the wider social policy objectives of the Government will be endangered. (Paragraph 118)

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