APPENDIX 3
Letter from the Chairman of the Social Security
Advisory Committee
Proposal for the Regulatory Reform (Carer's Allowance)
Order 2002
Thank you for your letter of 13 February asking for
the Committee's comments on the above proposed Order. We are very
happy to provide these, as this represents our first opportunity
to comment on the detail in the proposals. As you know, the proposals
were not put to us for scrutiny because - as I understand it -
the Department for Work and Pensions took the view that they did
not fall within the terms of our statutory responsibilities. We
understand that the Department attempted to consult the Committee
informally at the drafting stage, but that, as a result of a failure
in electronic communications, the request for our views was never
received. We are seeking advice from the Treasury Solicitor's
Department on the whole issue of the Committee's scrutiny of Regulatory
Reform Orders (RROs), and we are also in contact with the Department
for Work and Pensions with a view to putting in place a uniform
approach to RROs dealing with social security.
In general, we are very supportive of the proposals
in the Order. We have taken a continuing interest in the operation
of Invalid Care Allowance, and many of the changes being introduced
reflect concerns that we and others have previously raised with
the Department. However, in two areas we believe that the proposals
would benefit from further amendment.
The first of these relates to the issue that has
already been picked up by your Committee - the impact of withdrawing
the concession under Section 70(6). As we understand it the proposal
would affect the individual carer differently, depending on whether
or not they will be eligible to claim the Minimum Income Guarantee
at age 65.
Claimant to the Minimum Income Guarantee (MIG)
At present, where an ICA recipient is over 65, in
receipt of MIG and the person being cared for dies, the recipient
can continue to be awarded the Carer's Premium within the MIG.
(Although, oddly, someone in the same situation getting the Carer's
Premium because of an underlying entitlement to ICA would
have it withdrawn). However, under the proposal, any recipient
of ICA who is now under the age of 65, and could currently look
forward to keeping the Carer's Premium as part of their MIG -
should they be over 65 when the person being cared for dies -
will lose the Carer's Premium following the death. Given that
the current rate of Carer's Premium is £24.40, this is a
not inconsiderable loss of income. In addition, if the reduction
means that they are no longer entitled to the MIG, they also face
the withdrawal of full rate Housing and Council Tax Benefit.
No entitlement to the MIG
The situation is different for a person who is aged
over 65 when the person they are caring for dies and they have
no entitlement to the MIG (possibly because they inherit a relatively
small sum from the person they were caring for). At present this
person could continue to get ICA; under the proposals ICA would
cease. Many of this group will already have ceased to receive
ICA, because they have qualified for a basic rate Retirement Pension
(RP) by virtue of National Insurance credits arising from their
ICA. However, not all ICA recipients in this category will have
accumulated sufficient credits or actual contributions to qualify
for a full RP.
The Committee acknowledges that the proposed change
puts these two groups in the same position as other pensioners.
However, they have had a reasonable expectation that they would
retain this benefit, and their financial loss could be considerable.
In accordance with earlier work carried out by the Committee on
transitional protection, we consider that those who would lose
out as a result of this amendment, and who are currently aged
over 45, should have their entitlement to the 'age 65' concession
protected; and that the Department will need to give extensive
publicity to the introduction of this change, so that younger
carers who are likely to be affected can take timely steps to
alleviate the position.
Restrictions on the extension period
The Committee's second concern relates to the proposed
restrictions on the extension of entitlement for eight weeks after
the death of the person being cared for. The Committee strongly
welcomes the proposed extension, not merely on compassionate,
but also on administrative grounds. Notification of the death
of the cared-for person to the Department may not be in the forefront
of the carer's mind at the time of death, and the risks of late
notification and subsequent overpayment are therefore high. Against
this background the Committee does not support the withdrawal
of the extension where the recipient takes up employment or enters
full-time education. The rationale that we assume lies behind
this proposal (that these people have an income from elsewhere)
will not in all cases hold good (as a mature student the carer
may well have to fund their education) and even when the former
carer moves into paid employment there may well be a difficult
transitional period. Excluding some individuals from the extension
is likely to be seen as rather petty and will undoubtedly impose
an additional administrative cost on the Department, while yielding
only minimal savings. We would therefore recommend that the qualifications
to the extension are not proceeded with.
Finally we would like to thank the Deregulation and
Regulatory Reform Committee for referring this issue to us.
Sir Thomas Boyd-Carpenter
Chairman, Social Security Advisory Committee
5 March 2002
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