Examination of Witnesses (Questions 40-59)|
WEDNESDAY 27 FEBRUARY 2002
40. I want to ask some questions about the complexity
of the system. I was intrigued by something I read in Help the
Aged's evidence about the DWP's own research about the newly-qualified
pensioners being some of the most reluctant to claim. Did I get
(Mr Wilson) There is DWP research on the current batch
of people who are entitled but not claiming. Then I went on to
extend that thinking to look at the new types of people who are
brought in to entitlement. There are two reasons to be pessimistic
on take-up at that level. Firstly, these people, who by definition
have more money, are more likely to have worked, have better work
records and less experience of filling out forms for benefits,
are also more likely to have myths and significant bad viewpoints
of the DSS and the benefit system.
41. You are suggesting a target of 90 per cent
take-up within two years.
(Mr Wilson) As a charity we believe it is completely
unacceptable that a new flag ship benefit will not reach the people
that it is aimed at because they are too isolated, they do not
have English as a first language, or for many other reasons they
cannot access this benefit, which is supposed to be about combatting
42. Have you got any research that suggests
it is possible?
(Mr Wilson) No, we have not. It was merely a challenge
to the ministers to come up with something.
43. There seem to be contradictions between
what Mr Lishman said and what Mr Wilson said. I understood Mr
Lishman to say one of the factors influencing broad take-up was
the oldest pensioners, and you seem to be saying it is the newest
pensioners who by definition are the younger pensioners.
(Ms West) They are not necessarily.
44. Am I seeing a contradiction that is not
(Mr Wilson) I was talking about the `new pensioners'
who are being brought newly into new entitlement for means-tested
benefit. I agree entirely with what was said by Gordon that it
is the oldest pensioners. Increasingly this benefit will bring
in more of the oldest pensioners into the new entitlement.
45. You have all complained in your submissions
about the complexity of the Pension Credit. Would you agree with
what Baroness Hollis said: "the pensioner does not have to
do the calculating. The skill is in helping pensioners to know
that there is an entitlement for them to apply for"?
(Ms West) I think there is an element of that and
clearly pensioners do not need to look at the legislation. I think
if they did they would run a mile. It is also very important for
a lot of older people to actually understand how their benefit
is calculated because they worry about getting too little but
they also worry about getting too much, that somebody has incorrectly
given them money that they may have to repay. A lot of people
do want to understand the calculation behind it. We are already
getting people writing to us to say "can you explain exactly
how this bit is going to work?" I think it is important that
people not only understand or get a broad message that if you
are in certain income groups it is worth claiming, but understand
the process behind it. Also, although there will be some broad
messages put out on the kind of income ranges, there will be people
entitled to extra elements due to severe disability or housing
costs and they will need to know that they may still be entitled
even though their income is slightly higher than the standard
(Mr Kohler) People need to know roughly that they
are going to be entitled to a benefit before they pick up a phone
and ask whether they are. I think that is a first hurdle, which
we are somehow going to have to jump over if we are countenancing
a system which is going to bring half our elderly population into
an "asking" mode. And, of course, the situation is going
to change year by year under the proposals for the Pension Credit,
with more people becoming eligible each year as the indices move
in different directions. I think this is where the complexity
and the potential confusion in the public's mind will be a barrier
to people asking their new friendly Pension Service for help in
assessing their benefits.
46. What would your organisations do to try
and sell this message? We have heard a little bit about that earlier
on today. Would you ditch some of the complexity or do you think
the message in terms of advertising take-up should be done in
a different way and through different media?
(Mr Lishman) There are a number of different levels.
The first level is to create a situation in which it is unlikely
that an individual retired person is going to be living in poverty.
That is about the level of the Basic State Pension and it is about
a core attitude towards that, which is something this Committee
has discussed in the past. Secondly, it is about transparency
and clarity. It is about being able to say, "If I am in this
position, I follow that course and then I understand that that
will be the result." Thirdly, it is about the traditional
take-up campaignif you take Age Concern and Help the Agedthat
we are heavily involved in. We are talking directly by telephone
in the two organisations with some 600,000 older people every
year. In my case, the national organisation is communicating with
half a million people a year about benefits and our local Age
Concerns are talking to over a million more. We are listening
to and talking to people about those things all the time. If you
want to persuade people to claim, you have to get over a series
of hurdles that the evidence suggests is going to be extremely
difficult to do. If you are to do that however, following Richard's
point, the most important single element is independent advocacy.
That is to say someone who will share the responsibility with
someone when they put their signature on the end of a form, who
will help them to understand what comes to them at the next stage
and who will help them through that process so that they will
be able to get the best out of it. There are a number of ways.
I give credit to the ideas that the Pensions Agency are developing,
with some of the things they are trying to do in conjunction with
Consignia and so on. I do think historically the DWP has been
less open and encouraging than many of us would like in involving
organisations like ours, and many others, in that independent
advocacy role and letting us deliver the results in that sort
47. Clearly there is a major job for non-statutory
organisations in this and for statutory organisations
(Mr Lishman)Welfare and benefits go together.
48. And also on the way we approach advertising.
The United States, for example, use milk carton advertising very
successfully for missing children. Should we be looking more imaginatively
at how we tell pensioners what their rights are?
(Ms West) I think we should be looking at what can
be done automaticallythe idea that you do not have to go
out and encourage people to claim, that you can identify them.
One important area will be the Housing Benefit and Council Tax
Benefit records. A lot of the extra people who will be entitled
to the Pension Credit for the first time from October 2003 will
have already given details of their income and savings to their
local authority. Indeed, we know that there are a lot of people
getting Housing Benefit who should be getting MIG now. There are
various initiatives which are mainly trying to identify these
people and target them with information. What we would like to
see is a system where that information is fully shared so that
if you give the details to the local authority you tick a box
saying you also want to be considered for Pension Credit.
49. There is a lot of sharing of software now
between local authorities and the Department. I know there are
areas where it has broken down but that seems to me a sensible
way to try and develop this. You give information to one body;
why can we not duplicate it to others?
(Ms West) It is a Government aim but it has not become
reality yet. It is a very important thing to work towards.
50. I wanted to raise another question on the
administration, which I raised with both of you before. If 5.3
million pensioners are going to be potentially eligible for the
Pension Credit, based on what you have said and looking at the
Department for Work and Pensions administratively, is it going
to be able to cope with the Pension Credit for another 5.3 million?
(Mr Lishman) One of the things about creating a new
Pensions Agency, completely restructuring it and going for a substantial
investment in new software is that I am very glad I am not the
Secretary of State a fortnight after the whole system comes into
operation. What I am saying is neither we nor they know. You are
asking about experience. We are moving into a very different field.
The way the Pensions Agency will work is very different and there
are risks and I think the experience we have all had in these
areas would not necessarily lead us to be optimistic.
51. How would you lessen those risks?
(Mr Lishman) I think the biggest risk arises because
of trying to do everything at the same time and keeping up all
this pressure. It does not feel to me like good architecture,
it does not feel to me like a carefully constructed wall. It feels
to me like doing lots of different things in the hope that eventually
if you do enough different things that you will have covered all
the separate problems, and in view of the fact we are constructing
a system of income maintenance in later life, that is no way to
run a railway.
(Mr Wilson) If you are asking questions of Ministers
it might be interesting to ask them about the software, which
is going to be absolutely crucial. They do not have a particularly
good record on that issue. It would be interesting to find out
how confident they are on that issue. There are lots of parallel
reforms going onthe Pension Service being divorced from
the rest of the system, new ways of staff working, a whole new
payment method whereby a lot of pensioners will have to fill out
a form to open a bank account over the next few years. They are
attempting to do a lot at once when previously these kinds of
big changes have been rare.
(Mr Lishman) A very specific point might be one which
this Committee will understand in covering both work and pensions
in that with the new different agencies, combined with a Government
commitment to smooth the transition between working in retirement,
and having a less clear distinction, there are going to be a number
of either overlap areas or areas where people may fall between
the Working Life Agency and the Pensions Agency. There is another
group of things there that are going to potentially create problems
around that interface.
(Mr Lynes) Could I just add that no government has
ever before tried to means-test over five million pensioners.
The chances of that going smoothly seem to be extremely remote.
52. It is an ambitious Government, yes.
(Mr Lishman) We would like them to succeed.
53. You could say that with a bit more conviction!
(Mr Lynes) Might I come back to the question of complexity
about which we said quite a lot in our written submission. I personally
feel very strongly about this because I have been involved in
looking at social security legislation for roughly the last half
century and I do not think I have ever come across anything quite
as bad as clause 3 of this Bill. Clause 3, frankly, is incomprehensible.
54. Remind us what clause 3 is.
(Mr Lynes) Clause 3 is the one which purports to explain
the savings credit. The Pension Credit consists of the guarantee
credit and the savings credit. Clause 2 is the guarantee credit
and clause 3 is the savings credit. It seems to me what is new
about the Pension Credit is that the Government is introducing
a system of what we used to call "disregards", in other
words in working out your entitlement to MIG or Income Support,
whatever you call it, you ignore a certain amount of people's
incomes. So it is simply an integral part of the calculation of
MIG that you work out how much people are entitled to and in doing
that you ignore 60 per cent of certain types of income. What the
Government has done, however, is to try to divide it into two
different benefits. First of all, you get your guarantee credit
and then you get something else which is called the savings credit,
and what the savings credit actually is, is the difference between
the amount that you would have got under the present system and
the amount that you will get with the disregards. Trying to put
that into a mathematical formula, as clause 3 does, gets you into
the most ridiculous complexities and those complexities are completely
unnecessary. All they needed to do was say in clause 2, which
explains the guarantee credit, "in working out the guarantee
credit we will ignore 60 per cent of certain parts of your income".
We have suggested how this could be worded and we have got it
into two sub-sections of clause 2 instead of eight sub-sections
of clause 3. You may not think that our two sub-sections are a
model of clarity but they are certainly a great deal clearer than
clause 3. I really think it would be appalling if clause 3 found
its way onto the statute book in its present form, or indeed at
all. It is simply not necessary.
Chairman: Thank you for drawing that to our
55. I want to stick with the administration.
I wonder whether this five-year rule on reassessment is going
to help in terms of encouraging people to overcome their barriers
to applying, on the basis that if they apply and have a result
one way or the other, they know it is likely to hold good for
five years unless their income declines. Is that going to assist
with take-up in contra-distinction with something which might
be done annually and people think they are going to have to do
every year for the rest of their life?
(Ms West) It is one of the features that people will
only be assessed every five years and they will be able to have
small increases in income and that will not mean that they will
have to go and have it reassessed. The other side of it is that
it will be important that people have regular information on what
their benefit is going to be calculated on. To be honest, what
is more likely to happen is people's income goes down over time
(they spend their savings) rather than going up. We hear of people
now who get into problems because they had a small extra amount
of income and have an overpayment but generally pensioners' circumstances
are quite stable. The important thing is picking out those who
are perhaps entitled to more credit as the five-year period progresses.
(Mr Lishman) This is one of those problems where the
balance with work may arise. If people for instance earn a little
money, there will then be a question about the interface between
that assessment and particular people. So there is a group.
(Ms West) We are not clear whether earnings will be
one of the factors that you need to put forward, and that will
make quite a big difference to people who are earning small amounts
of money as to whether it is a very simple benefit to administer.
56. Can I ask one final question on access routes
to information. I suppose it is an administrative question. Mr
Wilson referred earlier to ethnic minorities often having difficulty
in accessing information. I was wondering about the telephone
route. Mr Lishman said that half a million telephone calls are
(Mr Lishman) That is the two organisations together.
Again that is related to benefits, there are others on other subjects.
57. Do you think the telephone route of access
for people of that age is user-friendly or not?
(Mr Lishman) Sometimes for some people. Older people
are the largest group in the population without a phone so you
have got that particular group of people. There are problems.
The whole operation of call centres and their friendliness to
older people is something we have looked at. We have talked to
people and we have been involved in training programmes, for instance
people who are operating call centres. It can work, it can be
friendly, it is about training and the purpose of that process
and how you do it. Yes, it does have some useful elements to it.
There are people it misses out and people who find it difficult
to follow that route. One of the other points, talking about these
groups, is that there are substantial groups of people suffering
from a degree of sensory impairment, so people with sight loss
or with hearing loss, which brings you into particular problems
with the use of media other than a person talking to you.
(Ms West) In looking at the positive things you can
look at there is the necessity of ensuring that there are sufficient
local Pension Service staff in each area. It is one of the issues
we are talking to the DWP about in terms of the local service
and how it might work in partnership with local organisations.
We are concerned that there will not be enough DWP staff to be
doing home visits and seeing face-to-face callers because that
is intensive timewise and they are often the people who need a
bit more time to go through forms.
58. You are also obviously talking to them about
(Ms West) There are telephone translation services
that DWP uses but you would also need them on a local basis.
59. I realise that. Are you talking to them
(Ms West) It is one of the issues that comes up in
meetings we have. One of the things DWP is doing is research looking
at older people and ethnic minorities and why they do not take
up benefits, which is important.
(Mr Kohler) It is part of the modern world that the
telephone and PC and so forth are going to become increasingly
the means of communication. Our older population is hopelessly
disadvantaged in that respect for the moment. It is not this Committee's
job to address that but it is the job of some committee somewhere
to address that to make better levels of telephone and electronic
communication available to our older population. I think my anxiety
about the telephone system goes back to the complexity of the
new arrangements which are being proposed. With the knock-on changes
to Housing Benefit and Council Tax Benefit meaning that different
threshold levels are part of the calculation, the way in which
somebody is going to have to be able to describe their circumstances
to an individual answering the phone, who is going to have to
be intuitive about asking the right questions, makes me worry
that this is not going to be an appropriate manner in which this
particular reform can be implemented.
(Mr Wilson) We are concerned about the quality of
the training available to staff who work in the DWP call centres.
They are on the very lowest grade of administrative assistants.
They are supposed to be offering a service that is quite interactive
and involves understanding the needs of older people. We feel
that is not likely to happen at present, not when you have got
these millions of calls having to be routed through in order to
get the take-up levels that are needed. That is why the services
that we offer have an added value compared to what the DWP offers.