Select Committee on Social Security Appendices to the Minutes of Evidence


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.


  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.


  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.


  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.


  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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