Select Committee on Work and Pensions Minutes of Evidence

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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