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Session 2001- 02
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Standing Committee Debates
State Pension Credit Bill [Lords]

State Pension Credit Bill [Lords]

Standing Committee A

Tuesday 23 April 2002

[Mr. Win Griffiths in the Chair]

State Pension Credit Bill [Lords]

Clause 9

Duration of assessed income period

Amendment proposed [this day]: No. 37, in page 7, line 4, at end add—

    '(6) For the avoidance of doubt, and notwithstanding regulations made concerning absence from Great Britain under section 1(5), the assessed income period shall continue through any period of absence from Great Britain during that period.'.—[Mr. Boswell].

4.30 pm

Question again proposed, That the amendment be made.

The Minister for Pensions (Mr. Ian McCartney): Good afternoon, Mr. Griffiths. It is nice to see you back in the Chair. We had some fun while you were away. The hon. Member for Hexham (Mr. Atkinson) got a grip of us in the end and sorted us out, so we learned our lesson from this morning's sitting.

Before we broke for lunch, I said to the hon. Member for Daventry (Mr. Boswell) that his remarks made this look like the Ronnie Biggs amendment. I want to withdraw that remark and imputation unreservedly. I realise that this is a probing amendment—we could call it an easyJet amendment.

Mr. Tim Boswell (Daventry): The immediate predecessor of the person who lives in the house in which I now live in my constituency was an amateur aviator, who distinguished himself by going up in his plane and spotting the great train robbers in the vicinity, carrying out their activities at Linslade farm. Although that has no direct relevance to the slur that the Minister has now withdrawn, I thought that it might amuse the Committee.

Mr. McCartney: I congratulate the hon. Gentleman on knowing someone famous. I hope that I will be able to recount such a story one day.

The effect of the amendment is best illustrated by an example. If a pensioner goes to Spain for three months over the winter, his entitlement to pension credit ceases after four weeks and the claim is closed. Under our proposed rules, on his return, he would reclaim the pension credit, the income would be reassessed and a new assessed income period set. However the effect of the amendment would be to keep the original assessed income period running in the background when the claim closed, so that any remaining period would still apply on reclaiming. In effect, this is a taxi rank proposal, whereby the meter keeps running until the person comes back.

Mr. Boswell: For the avoidance of doubt, let me say that it was my intention not that the entitlement for the weeks of absence should stack up, but that the weekly entitlement should be reactivated on return, as if the person had never been away.

Mr. McCartney: I can see why the amendment

Column Number: 184

might have some appeal. Arguably, such a mechanism might facilitate a more seamless reintegration back on to pension credit—and seeing as I have been advocating that in Committee, I want to maintain my consistency. It would also prevent the person's pension credit from being reduced when he returned home and reclaimed because he had won the lottery, either English or Spanish. Of course we are ignoring lottery wins during the assessed income period not because we think that such people need pension credit, but because we want to reduce intrusiveness for all recipients of pension credit. We can live with ignoring a few individuals' good fortune for the sake of simplification for the overwhelming majority of pensioners.

If a new pension credit claim is needed, it would seem perverse not to take that opportunity to reassess the claim there and then. I doubt whether the taxpayer, the lottery winner or the hon. Gentleman would consider that to be unreasonable.

On the point of seamless reclaiming, a person who returns to Great Britain would obviously need to contact the Pension Service in order to reclaim. It is therefore debatable that the amendment would make reclaiming easier by ensuring that such a person's income would not have to be reassessed.

In designing pension credit, a key consideration has been to keep the system as simple and hassle-free as possible for the customer. That is precisely why we have moved from the intrusive weekly means test to a five-year assessed income period. That is also why we intend strictly to limit the number of changes in circumstances that would require a reassessment of income. Protracted absence abroad is one such instance. We also think it is right when a pension credit claim closes. As I said before, if it is a fresh claim, it seems entirely consistent to make a full assessment.

After all, the hon. Gentleman should accept that an individual's circumstances may have deteriorated during that time. When one goes abroad, one spends one's capital. It would seem sensible that, at the point of re-entry into the pension credit, a full assessment should take place, especially as it might be to the advantage of the pensioner.

Not all people who go abroad know how long they will be away. For instance, the hon. Member for Canterbury (Mr. Brazier) mentioned a tragic case last Tuesday about one of his constituents, who travelled abroad to visit a terminally ill daughter and ended up having to care for her for years rather than weeks or months. It cannot be very satisfactory to hold closed claims in a kind of limbo pending a reclaim that may or may not occur on a future unspecified date.

It is also fair to say that it may be in the claimant's interest for a full assessment to be carried out on return from a protracted absence, because people are more likely to win than to lose out. People who have been abroad for some time are more likely to be in a lower income stream because they have used their savings than they are to have won the lottery in Spain. I ask the hon. Gentleman to withdraw the amendment.

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Mr. Boswell: The Minister gets an A for the clarity of his explanation, but only a C for acceptability. I am sorry to disappoint him; he is clearly distressed.

Mr. McCartney: That is more than I ever got at school.

Mr. Boswell: All I can say is that the Minister reminds me of the pupil who received an autumn term report that said, ''Trying'', a spring term report that said, ''Still trying'' and a summer term report that said, ''Still very trying''. The Minister usually does better for the Committee than that.

The Minister has not addressed the real point. He says—he may be right; I do not contend that—that many people who return from protracted absences abroad may have spent themselves out, and might be better off with a new assessment. However, unless I completely misunderstood him, and even though I missed some of this morning's debate, it seems that it would be open at any time to a disadvantaged pensioner to make a fresh claim. A pensioner who returned to the country could say to the Pension Service, ''I want to make a fresh claim. I have spent myself out. I have gone over the top. I no longer have the money that I thought I had.'' I appreciate that the provision is framed neutrally; it is designed to deal with the pensioners who might lose out. The Minister says that that might be equitable because the assessment made on the return of the pensioner would be processed in accordance with the facts of the matter—for instance, he might suddenly have come into £1 million and it might no longer be appropriate to pay it.

My concern relates to the thought processes of pensioners thinking about leaving the country. They may have a certain entitlement to benefit. I am not saying that they go abroad with the prospect of a sudden windfall; there may have been a change in their circumstances before that. However, they are riding on a five-year assessment that cannot be withdrawn. They have a vested interest in the proper sense of the word, but if they have choice of whether or not to go abroad, they may feel inhibited in doing so because it might lose them benefit.

Kevin Brennan (Cardiff, West): Is the hon. Gentleman not in danger of wanting to have his cake and eat it? Earlier, he said that there should be no reassessment for those who had committed criminal offences and were sent to prison. He is now saying that if someone wins £1 million on the lottery and then decides to go on a world cruise for a year, they should still be entitled to a pension on their return.

Mr. Boswell: I understand the hon. Gentleman's argument, but I am saying that other circumstances might pertain; far different from winning £1 million, it could be a matter of pence a week. However, pensioners with hard-won savings who are trying to eke out their savings and other income will be put in a difficult situation if they know that they will lose benefit after going away for four or five weeks. There may even be implications in the European convention on human rights relating to freedom of movement around the European Community. I am not sure that it would be defensible for the free movement of

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individuals to be inhibited by the potential loss or scaling down of a benefit.

In response to the hon. Gentleman, let me say that I am certain that in moral terms the position is stronger than the one that we discussed earlier in connection with criminals. As I said, the Committee clearly did not want criminals to profit from going to prison—in fact, they would not have profited, but the argument was whether they would adventitiously have lost more than they would otherwise lose in relation to their sentence.

We are not discussing only discretionary visits abroad for a holiday, although that may be an attractive idea. As my hon. Friend the Member for Canterbury rightly reminded the Committee the other day, a pensioner may have to go abroad for medical reasons. I do not think that medical treatment abroad under the national health service is excluded under the Bill; indeed, pensioners would lose benefit if they were in a United Kingdom hospital, but after 13 weeks rather than the four that they would have to spend abroad to lose benefit. I add that point to the general confusion that surrounds the provision. A pensioner might also want to support a member of his or her family resident abroad, and it is unfair that pensioners' benefit should be scaled down for such a reason. Someone else who remains in the United Kingdom—a sister or brother, for example—may have had a bigger windfall under the same will but will not lose out because they do not leave the jurisdiction.

Although the Minister has tried to explain the provision—I appreciate his good will—I do not think that he has sufficiently answered the question. It would be desirable to provide for a suspending power for the credit as well as for a reapplication for change of circumstance power if the credit were terminated and restarted. The issues are difficult ones and we may want to return to them, perhaps in the context of the regulation. However, perhaps uncharacteristically, I feel strongly on what may seem a technical issue, and I must advise my hon. Friends to vote for the amendment.

Question put, That the amendment be made:—

The Committee divided: Ayes 7, Noes 10.

Division No. 2]

Boswell, Mr. Tim Brazier, Mr. Julian Clappison, Mr. James Ewing, Annabelle
Mercer, Patrick Selous, Andrew Webb, Steve

Brennan, Kevin Cairns, David Cruddas, Jon Eagle, Maria McCartney, Mr. Ian
Mann, John Osborne, Sandra Purnell, James Smith, Angela Tynan, Mr. Bill

Question accordingly negatived.

Question proposed, That the clause stand part of the Bill.

4.45 pm


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