State Pension Credit Bill [Lords]

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Mr. Ian McCartney indicated assent.

Mr. Boswell: The Minister nods in agreement.

At the back of my mind, I believe that arrangements can be made for people who have nominal entitlements—to a teacher's pension at the age of 60, for example. In cases involving small amounts, it is possible—and it has been practised in the past—to compound them into a single capital payment. Even if the entitlement were only 10p a week and the assessment period merely five years, I would still be pleased to receive that cheque. Will the Minister tell us the purpose of the provision and how it will work?

Maria Eagle: The hon. Gentleman has shown a full understanding of the de minimis rule, so I will not detain the Committee by explaining exactly what that is in all circumstances. It is a concept that he has discovered partly through family experience, but which is well known in the social security system. It is a way of ensuring that extremely small entitlements—under 10p per week—are not carried through, and that people do not receive cheques for ridiculously small amounts.

A similar amendment in the other place, which suggested paying the amounts annually, was withdrawn. If there were no de minimis rule, by omitting subsection (3), the hon. Gentleman's amendment would leave us having to pay those small amounts weekly, and the amounts would be even more derisory. His amendment presents more problems than the one tabled in the other place, which at least suggested annual payments.

The hon. Gentleman suggested a five-yearly payment. However, it is the income assessment that is five-yearly. Payment is made weekly. For that reason, we still need the de minimis rule. As he knows, we do not simply write off those amounts of money. If the customer concerned is in receipt of any other benefit, we consolidate the small amounts with that. We do not send a separate cheque for under 10p

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a week, but an additional bit will be added to their other benefit.

In practice, the operation of the de minimis rule affects a small number of people. On the assumption of 100 per cent. take-up of pension credit, it is estimated that about 10,000 people will be entitled to less than 10p a week and be caught by the de minimis rule. In 95 per cent. of those cases, we would be able to combine the payment of the pension credit with another benefit.

Only about 500 pensioners would be affected. I agree with the hon. Gentleman that to receive a weekly cheque for 1p or 2p from the Department would be severely aggravating to most pensioners. We are talking about a small number of people and a small amount of money. He already understands the de minimis rule and I hope that I have explained why we need to retain it for pension credit. The financial detriment to a small number of people to whom we cannot pass on the tiny amount of pennies will be minor. I hope that the hon. Gentleman will accept that we need the provision and that he will withdraw the amendment.

Mr. Boswell: I thank the Under-Secretary for her most persuasive response. It has been useful to rehearse such arguments. It is difficult when people lose out because of the de minimis rule and I accept that the Government do not want that to happen. But a few such cases will arise and I see no way of avoiding the problem, without breaching the concept of the de minimis rule. I am not sure that many pensioners will want to cross the road for tuppence, as it were, or that they would thank the Government if they did so. Given the intimate relationship of pension credit to retirement pension and so on, I still find it difficult to think how such a situation would arise. However, the hon. Lady suggested that there may be some 500 such cases a year. I am grateful for her response. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 4 ordered to stand part of the Bill.

Further consideration adjourned.—[Angela Smith.]

Adjourned accordingly at four minutes to Four o'clock till Tuesday 23 April at half-past Ten o'clock.

The following Members attended the Committee:
Griffiths, Mr. Win (Chairman)
Boswell, Mr.
Brennan, Kevin
Cairns, David
Cruddas, Jon
Eagle, Maria
McCartney, Mr. Ian
Mercer, Patrick
Mountford, Kali
Osborne, Sandra
Purnell, James
Selous, Andrew
Smith, Angela
Turner, Mr. Neil
Tynan, Mr.
Webb, Mr.

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