Letter to the Second Clerk from Help the
Aged (PC 15A)
Many thanks for the opportunity to give evidence
to the Select Committee last month. This letter is a brief reflection
on the questions the Committee put to the witnesses. Anne Begg
and Joan Humble raised points about the nature of the means test
and the problems of take-up. It is our firm belief that there
is a deep difference in the public perception of benefit applications
and tax assessments. Benefit enquires are much more intrusive,
seeking personal and family information, and are complex with
overlapping qualification criteria and a raft of disqualifying
rules.
The Pension Credit adds significantly to these
features of the benefit system, and however sensitively benefit
claimants are treated, means-tested will remain intrusive, complex
to understand, and generally seen as unfair at the margins in
particular. In terms of clarity, Help the Aged believes that few
pensioners will have much grasp of what they are entitled to and
why they are getting it (and the Government is selling this as
a positive disadvantage of the one-stop shop, seamless Pension
Service), and future pensioners will have little idea of how best
to make personal provision.
Benefit claims will almost inevitability fall,
hence our response to Archy Kirkwood that a target should be inserted
into the Bill. Perhaps the public will think differently, with
every pensioner automatically making an application, and every
unsuccessful one making a repeat enquiry after the next years
up ratings. This could be testing for the Pensions Service. The
need for community-based advocates on counsellors was part of
the response to David Stewart, but the voluntary agencies can
only play that role today in an uneven and patchy manner.
Can the Department for Work and Pensions cope
was the thrust of Rob Marris question. It seems improbable. The
MIG take up campaign achieved slender results by comparison with
the numbers the Pension Credit will need to approach. The telephone
led front end is a new concept and call centres hold no great
public confidence even in handling simple issues: the banks seem
to be setting an unhappy example. The computer back up is not
in place, and new technology projects of this scale have an uninspiring
second.
Mistakes will be made. The problem for benefit
recipients (as against tax payers) is that the sums of money that
they receive really matter in terms of survival from week to week.
And given the pattern of pensions spending down savings, the long-term
(five year) fixed assessments seem unlikely to be a commonplace
feature.
Anne Begg's second intervention raised the income
disregard. The PIU report 'Winning the Generation Game' was eloquent
about extending the opportunities and incentives for older people
in the sphere of employment. In this respect, the Pension Credit
is a perverse incentive; Every Government policy should be supporting
the principle of active ageing.
The knock on interaction with Housing Benefit
and the Council Tax Benefit was explored by Rob Marris. Broadly,
the Government has come up with the right moral answer, but it
remains poor public policy by further obscuring the detail eligibility
and calculations. It returns us to the points about clarity, fairness,
and the potential for mistakes.
Finally, may I make a point which time did not
permit but may be worth rising with the Minister. Releasing equity
capital is seen as an increasing option in meeting the costs of
housing adaptations, improvements and repairs, and to pay the
costs of care. After a period of deep uncertainty a decade ago,
even the Home Improvement Plan is enjoying a new lease of life.
The regulations envisaged for Pension Credit make no reference
to the treatment of equity release schemes at all, so we must
presume that any pensioner seeking to augment his or her income
in this way could be jeopardising an entitlement to Pension Credit.
Mervyn Kohler
11 March 2002
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