APPENDIX 4
Further information provided by the Department
for Work and Pensions
Proposal for the Regulatory Reform (Carer's Allowance)
Order 2002
Oral Hearing 5 March 2002
1. Points were raised in the course of the
Oral Hearing on 5th March. The purpose of this Note
is to briefly address these issues in order to assist the Committee
in their deliberations.
Social Security Advisory Committee (SSAC)
2. Two main points were made.
3. Extending Transitional Protection(TP)
to those customers aged 45 and over at the date of the change
of the law.
The Government's proposals
seek to provide transitional protection for those customers entitled
to ICA who are aged 65 or over at the date of change. This would
preserve their right to retain entitlement to ICA even if they
subsequently cease to meet one or both of two of the conditions
of entitlement to the benefit (fulfilling the caring condition,
and undertaking employment at rates above the permitted earnings
limit).
4. The purpose behind the inclusion of the
concession in the original 1976 rules for Invalid Care Allowance
(ICA) has been explained in the 17 December 2001 Statement to
the Committee. The alternative income protection now available
to carers was also explained in that Statement and in my letter
to the Committee dated 8 February.
5. It is also worth reiterating that s70(6)
of the Contribution and Benefits Act applies only to claimants
who establish entitlement to ICA under the age of 65, and would
not (without further changes to the 1992 Act) apply to those carers
over the age of 65 who will be able to claim for the first time
under the proposals. This would create a cliff-edge effect whereby
new claimants aged 64 and 65 respectively would be subject to
different basic conditions of entitlement. At the Oral Hearing,
Mr Pike asked whether the solution was therefore to make the necessary
changes in order to ensure that the concession was available to
over 65s as well. In response, Charles Ramsden suggested that
Ministers would be likely to see this as not only maintaining,
but actually extending an arrangement, the policy basis for which
had disappeared over time: in practice, creating further anomalies
rather than trying to close them down over time.
6. In practice most carers over 65 do not
receive ICA as they receive Retirement Pension instead. Only those
with no pension, or a low rate of pension will receive ICA, often
small amounts as a top-up to a reduced rate pension. Entitlement
to ICA brings access to carer premium in Income Support, but there
are already rules within the income related benefits which prevent
payment of carer premium in cases where there is entitlement to
ICA but it is not payable, (because RP overlaps) and the disabled
person dies or loses their qualifying benefit.
7. The Advisory Committee have approached
this problem by proposing a considerable extension of transitional
protection, to all current recipients aged 45 or over. As I sought
to explain at the Hearing, this approach would benefit only a
very few carers. This is because transitional protection attaches
to the claim not the person. When the claim ends, the protection
ends. If a new claim is made, protection cannot be re-awarded.
The median length of an ICA award is around 3.5 years: hence the
vast majority of 45 year old carers would not still be carers
at age 65. Even for those with long term caring responsibilities,
who are still entitled to ICA at 65, the concession would only
apply to those who ceased caring, and had no or limited pension
entitlement, or if on low income, ceased caring for some other
reason than death of disabled person (or loss of qualifying benefits).
Clearly, long-term protection arrangements are very difficult
to administer in situations like this, where there is no way of
knowing exactly which claims (let alone which claimants) will
actually require the protection at some future date. Every extant
claim would have to be tracked against a need which might arise
up to 20 years in the future.
8. Finally, I should add that extending
the protection to benefit (in the event) very small numbers of
carers would maintain the differential and anomalous treatment
of two groups of carers for a further 20 years - those claiming
ICA after the age of 65 and some (but not all) of those aged under
65 at the date of change in the law. This would be difficult to
reconcile with Ministers' wish to achieve as equitable and fair
treatment as possible for all claimants.
9. Eight week extension period
The policy intention behind
the extension of entitlement to ICA for 8 weeks is to reduce pressure
on vulnerable carers faced with decisions about their future on
the death of the disabled person - a period which may well be
distressing for them, and during which they may naturally find
difficulty in adjusting quickly to their new circumstances, including
(as it may be) the need to consider re-entering employment. Essentially,
the Government's proposal is that the other conditions of entitlement
remain unchanged throughout the eight week period. This means
that conditions affecting entitlement such as residence and presence,
gainful employment, full-time study etc. will still apply, as
will the overlapping benefits rules (common to many benefits across
the benefits system).
10. To relax other conditions during the 8-week
period, as the Advisory Committee suggests, would require extensive
further changes to primary legislation (with associated funding),
but without assisting a key policy intention behind the package
as a whole, namely to help the most vulnerable carers - those
of pensionable age, of lower income, those combining work and
active caring and those having to make difficult decisions following
bereavement.
11. The proposals will allow carers to have choices
about the timing of their return to work, taking up study etc.
It is surely right that income gained thereby is treated in the
normal way.
The Deregulation and Regulatory Reform Committee
12. Programme cost of the concession
We were asked by the Committee
what the savings to Government would be through the removal of
s.70(6). The amount involved is both small and difficult to calculate,
(certainly it has not been calculated in terms of a saving to
Government), but working on our existing projection of about 230
people a year who benefit from s.70(6), we estimate that the current
cost to government of the concession does not exceed £500,000
pa.
13. Administrative cost of the concession
at present
We also undertook to let
the Committee know the administrative cost of retaining the concession
in its current form. Having now looked into this issue we believe
that the administration involved in maintaining the concession
is in fact less than that would be the case if it were removed.
This is because a system where continued entitlement to a benefit
no longer depends upon the recipient continuing to meet key conditions
off entitlement requires little in the way of clerical case management
or review.
Conclusion
15. The withdrawal of the concession affects
no-one's benefit at the point of change. No-one will have benefit
withdrawn as a result of the proposals. All that will happen is
that future carers reaching 65 will have to meet the conditions
of entitlement, as those under 65 do now. All, rather than some,
carers whose caring duties end will have their entitlement discontinued.
Ministers are also satisfied that sufficient alternative means
of financial support exist to prevent hardship.
16. The question of proportionality remains at
the heart of this process. Ministers' proposals reflect the conviction
that burdens lifted by the removal of the age barrier, so that
the rules for the benefit operate equally throughout for all customers,
vastly outweigh those imposed by the withdrawal of the concession
and that the package as a whole helps very many people facing
caring responsibilities at a later age, on lower incomes, and
those affected by bereavement.
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