APPENDIX 23
Memorandum submitted by Help the Aged
(SF 36)
1.1 Help the Aged was set up in 1961 to
respond to the needs of poor, frail and isolated older people
at home and overseas. As a national organisation we campaign with
and on behalf of older people, raise money to help pensioners
in need and provide direct services where we have identified a
gap in provision.
1.2 Help the Aged welcome the Social Security
Select Committee's inquiry into pensioner poverty and is very
pleased to have the opportunity to contribute.
SUMMARY AND
MAIN RECOMMENDATIONS
2.1 Help the Aged believes the present operation
of the Social Fund can rob older people of their dignity and independence
by;
— forcing the very poorest older people
into debt, and by pushing their income below the level of the
Minimum Income Guarantee, which is supposed to be the lowest income
older people can live on;
— not recognising the stigma many older
people associate with debt;
— placing some of the most vulnerable
older people under undue stress at times of crisis or bereavement
due to the strict operation of the eligibility rules and the sometimes
poor advice given by staff;
— and issuing grants on the basis of
resources available on any one day in any one locality rather
than purely on the basis of need.
2.2 Help the Aged therefore calls on the
Government to exempt people over pension age from making Budgeting
and Crisis Loan repayments. Pensioners should receive all Social
Fund payments as grants, as an extension of the Government's strategy
of targeting resources at the poorest pensioners.
2.3 Help the Aged also recommends that local
Social Fund budgets should be made more flexible, and reassessed
to ensure they adequately meet need.
2.4 The final sections of this submission
also makes recommendations about improving the quality of information
and advice available to older people who may require a Social
Fund payment.
OLDER PEOPLE
AND SOCIAL
FUND DEBT
3.1 The Social Security system should protect
those on low incomes from unnecessary and burdensome debt. People
on low incomes often find it difficult to budget for large one-off
expenses, and the Social Fund should act as a safety net for these
circumstances. Over the last few years two factors have particularly
reduced the effectiveness of this safety net, and acted against
the interests of the poorest pensioners:
— A move away from grants to loans.
— An increase in the number of refusals.
3.2 Many pensioners, especially older pensioners,
have a much more negative view of borrowing and debt than the
rest of the population. Older people are much less likely to have
a credit card or overdraft, and may have less experience of loans
and borrowing. For many there is still a great stigma attached
to debt, and there is much anecdotal evidence that some older
people would rather go without than get into debt. Therefore,
the transfer of Social Fund payments from grants into loans could
be leading to a de facto exclusion of some older people from Social
Fund payments.
3.3 The present working of the Social Fund
is incompatible with the Government's strategy of targeting resources
at the poorest pensioners to tackle pensioner poverty. Loan repayments
literally undermine the Government's Minimum Income Guarantee
(MIG) by forcing people to live on incomes below the "guarantee".
From April 2001 the MIG will be worth £93.15 per week for
single pensioners. Repayment of a loan at a 10% or 15% rate will
leave a MIG recipient with just £83.84 or £79.18 a week.
The Family Budget Unit research calculated that a single pensioner
needed between £99 and £125 a week to achieve a "low
cost but acceptable income". Therefore even small debt repayments
can force pensioners on to an unsustainable income.
3.4 Pensioners are in an almost unique situation
in that they have almost no prospect of increasing their incomes,
other than through state benefits. Making older people repay their
Social Fund payments cannot prompt them to make positive changes
to their lives, such as taking up paid employment to become less
dependent. Therefore, the only purpose of making pensioners repay
loans appears to be to save the Government money. In 1999/2000
pensioners received £14.6 million pounds worth of Budgeting
Loans. Given the Government during the same period targeted £3.8
billion at the same pensioners through the increased MIG, this
"penny pinching" seems futile.
3.5 Help the Aged therefore calls on
the Government to exempt people over pension age from making Budgeting
and Crisis Loan repayments. Pensioners should receive all Social
Fund payments as grants, as an extension of the Government's strategy
of targeting resources at the poorest pensioners.
3.6 Loan and grant budgets are set locally
for each Benefits Agency (BA) office, who set a spend limit for
each month. Applicants often find that near the end of the month
it is very difficult to get a payment because their local office
is running very low or has spent all their Social Fund budget.
This creates a "postcode lottery" system whereby claimants
with identical applications can be refused depending on which
district they live in. This means that despite the claim for a
Community Care Grant (CCG) being judged to meet the criteria set
out in "Direction 4", the application can be blocked
due to insufficient priority. According to the Social Fund's annual
report, in 1999/2000 7,041 pensioners were refused a CCG because
their claim was considered of "insufficient priority".
This represents 26.1% of CCG refusals for pensioners. The Social
Fund is designed to offer help as a last resort to the very poorest.
It is unacceptable that this vital safety net can be withdrawn
at certain times of the year because of problems with local budgets.
3.7 Help the Aged therefore recommends
that local Social Fund budgets should be made more flexible, and
reassessed to make sure they adequately meet need.
INFORMATION AND
ADVICE
4.1 Through our confidential free advice
line for older people and their carers, SeniorLine, we deal directly
with the problems encountered by older people in accessing the
Social Fund. During 2000, SeniorLine received 605 calls regarding
the Social Fund. Help the Aged believe that poor information and
advice about Social Fund payments is preventing older people from
accessing payments which are designed to help them stay independent,
and is adding to older people's stress at times of crisis or bereavement.
Examples recorded by Seniorline of Social Fund applicants receiving
poor information or advice are in the final section of this submission.
4.2 One of the most common problems encountered
by SeniorLine callers, was that they had been given incorrect
information by Benefits Agency staff regarding the eligibility
criteria to Social Fund payments. Often potential applicants are
informed they are not eligible, but when advice workers speak
to the caller it is clear that they do have a strong case. When
SeniorLine staff encounter such callers they will correct the
information they have received and advise them to recontact the
Agency to make an application. But the majority of people will
not question the advice they receive from the Benefits Agency
and will not seek help from organisations such as Help the Aged.
Presumably, such people will never apply for the badly needed
grant or loan to which they were actually entitled. SeniorLine
record the details of some calls, and examples of where the Benefits
Agency has misinformed callers are attached in the final section
of this submission.
4.3 It appears to be common for people who
contact the Benefits Agency not to be told about the existence
of Community Care Grants and are pushed towards applying for a
budgeting loan, even when there is clearly a possibility that
they will be eligible for a grant. Help the Aged believe there
is a culture within the Agency which is to discourage access to
CCGs in favour of a loan due to reasons of priorities and resources.
Clearly staff have a duty to inform people about the CCGs if they
ask, which does not always happen at present. However, Social
Fund applicants should also be informed about CCGs even if they
do not ask specifically about grants. If the dual system of grants
and loans is to continue for pensioners, older people asking for
help should at least be informed about the existence of grants.
4.4 In addition, Seniorline has found that
some older people have had difficulty finding out about the Social
Fund from sources outside the Benefits Agency. Many people's first
port of call during a crisis will be their local authority, and
a number of older people may be in regular contact with Social
Services. Yet in a few cases there is a worrying ignorance of
the Social Fund amongst local government officers who deal with
older people and carers.
4.5 Applicants are likely to attempt to
access the Social Fund during times of acute stress and worry.
Being given incorrect advice by the Benefits Agency can only add
to the stress of their situation. This is especially true of bereaved
people trying to gain a funeral payment. Help the Aged believes
it is unacceptable for bereaved older people to be put through
undue stress when trying to find ways of meeting the costs of
the funeral of a spouse or close relative by incorrect advice
from the Benefits Agency.
4.6 Based on the concerns and problems
raised by callers to Seniorline, Help the Aged recommend changes
be made in the administration of the Social Fund:
— Training for Benefits Agency staff
should be improved to increase awareness of the eligibility criteria
for Social Fund payments.
— The culture of not informing potential
applicants about grants and pushing people towards loans should
be ended. Ministers and BA managers need to address the Social
Fund resource priorities that support and perpetuate this culture
of misinformation.
— Information about the Social Fund
needs to be spread more actively from the DSS to outside organisations
that deal with older people, and particularly to local Social
Services departments to raise awareness of the loans and grants
available.
CASE STUDIES
RECORDED BY
HELP THE
AGED'S
"SENIORLINE"
5.1 Caller's 69 year old mother was widowed
and applied for funeral grant. She was told that the maximum grant
was £800 but, as she has savings of £950, she was not
eligible. However, this advice given by the Benefits Agency was
incorrect. As the claimant is over 59, £1,000 capital should
be ignored. 14/12/00
5.2 Caller had previously rung SeniorLine
and been advised that she may be able to claim a Community Care
Grant from the Social Fund for travel expenses to see her mother.
She rang her local Benefits Agency, who told her there was no
such thing but that she might be able to get a loan. They only
sent her a form for a CCG when she asked for the advice in writing.
18/8/00
5.3 Caller is on Income Support and was
widowed in January 2000. Her husband paid into a funeral plan
in instalments. Since the final instalment of £600 was not
paid before he died, the plan refused to pay out. When the caller
approached the Benefits Agency for a Funeral Payment, they advised
her to pay the outstanding £600 instalment from her own small
savings, so the plan would pay for the funeral. She was assured
that the Funeral Payment would then be paid to reimburse this
£600, as long as she kept the receipt. However, a Funeral
Payment from the Benefits Agency will not cover this type of expense,
so her claim was refused upon production of the receipt. The whole
matter has been sent to Benefits Agency Legal Dept for consideration
but she has heard nothing since. 29/6/00
5.4 Caller lives in her own home, which
was recently damaged in a fire. She has no gas or electricity
and no money to pay for repairs. She approached Social Services
and was told that they had no idea how she could get help. She
approached the Benefits Agency, who told her (wrongly) that she
would not qualify for a crisis loan, as she was not on Income
Support. 24/5/00
Richard J Wilson
Policy Officer
19 January 2001
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