Draft State Pension Credit Regulations 2002

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Mr. Steve Webb (Northavon): The Minister mentioned that the upper capital limit and the £18,000 limit for people in residential care will be abolished, which is absolutely right. Will that apply when local authorities assess whether they will pay anything towards the fees of people in residential care? The two systems tend to mirror each other. Will the policy carry across to such assessments?

Maria Eagle: As the hon. Gentleman will remember from our earlier debates, that is a matter for the Department of Health, which is considering how to carry out the policy intention. I do not as yet have any further news for him on how the Department has decided to do that, but it is considering its responsibilities carefully.

Hon. Members who were involved in the Committee on the primary legislation will recall our debates on the reward for saving. I do not intend to go over them again. Regulation 7, which specifies the rate of the savings credit, should not hold any surprises for hon. Members who recall the debates. From age 65, pensioners will receive a cash addition of 60p for each £1 of qualifying income that they have above £77, which is the expected level of the basic state pension, up to a maximum of £13.80 a week or £18.60 a week for couples. Above that, the regulation provides for the maximum reward to be reduced by 40p for each £1 of income above the guaranteed level.

On the assessed income period, the second major innovation that we are making with pension credit is to break away completely from the weekly means test. From age 65, most pensioners will find that we are able to fix the retirement provision in their assessment for five years at a time. Regulations 10 to 12 provide the rules for the setting and operation of the assessed income periods. The practical effect of regulation 10 is that pensioners will not have to tell us about increases in their second pension, savings or investment income during that five-year period. The regular annual uprating of second pensions will be taken into

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account automatically. However, pensioners will be able to tell us at any time if their income decreases, in order to have their entitlement increased.

Regulation 11 ensures that the assessed income period and the benefits it will bring to pensioners will continue should responsibility for their retirement provision change. Regulation 12 provides for ending an assessed income period before the five years are up. In practice, pensioners will have to tell us only of any significant life changes, such as moving into a care home, bereavement or remarriage—the sort of things that they have to tell us about anyway for their state retirement pension.

I have not covered all the technical provisions, but I will be more than happy to answer questions that hon. Members may have thought of while examining the detail of the regulations. I realise that some of the provisions may seem very complicated. That is because, in many instances, they carry forward into pension credit some of the existing income support rules. The regulations are a first instalment that provides concrete proof of the Government's determination both to tackle pensioner poverty and to reward pensioners for the first time for having saved.

4.44 pm

Mr. Tim Boswell (Daventry): I echo the Minister's remarks in welcoming you to the Committee, Mrs. Roe. Sometimes our band of social security anoraks, as we were described in a recent parliamentary sketch, feels that it labours without recognition, but we are always pleased to welcome another person to our number.

The issues are extremely important and we should debate them properly. In that context, I am genuinely grateful for the Minister's attempt to explain the details of the regulations. She has sought to find a balance between going through every last provision—she would have had some difficulty in the time allotted—and merely brushing over them. We have had whiffs of party politics, and those of us who contributed to the debates on the primary legislation do not need to rehearse those arguments at length.

The Minister's speech has been helpful in setting the context for these complex and, as she said, meaty regulations. There are precisely 50 pages of text and we do not have a long time in which to consider them. I suspect that this is because I, like many hon. Members, was not in the House on Friday, but I did not receive my formal appointment to this Committee until Saturday morning, and the brisk task of reading the regulations over the weekend therefore ensued. If the Minister wished to admit it, she could say that she might not be entirely au fait with every last provision in the regulations—I would not necessarily think even more of her if she were, although it would be an amazing effort. She has, however, attempted to explain the outline.

I also welcome the Government's decision to exclude compensation payments. The Minister will remember from our debates as we moved towards

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Report that a number of Government and Opposition Members were concerned about compensation payments, which are the simplest and most humane way in which to deal with these matters, for both industrial injuries and other conditions.

Having begun with those pleasantries, and bearing in mind my remarks about the time available in which to study the regulations, I am concerned by the Government's general approach. We would all have benefited from looking at the regulations for a little longer. Perhaps a pattern is developing, because this week the Government have seen fit to lay 13 statutory instruments before us. Three statutory instruments are being debated right now, and were the Minister for Pensions in the Committee, he and I would remember our involvement over many years with the national minimum wage, which is the subject of one of them. One may have a number of attainments as a shadow spokesperson, but being in two places at the same time to debate two regulations—a contribution that one is entitled to make—is not a practical possibility.

Ramming regulations through at comparatively short notice and in massive quantities is a pity and may in the end give rise to mistakes that will subsequently have to be ironed out. As I possibly said explicitly and certainly implied in our debates on the primary legislation, I have considerable respect for officials who draw up regulations based on what one might loosely call the custom and practice of the old Department of Social Security, which is now the Department for Work and Pensions, or its precursors.

As the Minister said, the regulations originate in, and to some extent are improvements on, income support rules that reflect years and years of tribunals, decisions and deliberations by the Social Security Advisory Committee. It is possible to discern some apparent incoherence in the rules, but I shall not amuse the Committee by reading out selected gobbets.

Mr. Brazier: Oh, go on.

Mr. Boswell: Very well. The one that I particularly liked was the rule that states:

    ''A person is to be treated as not in Great Britain if he is not habitually resident in the United Kingdom . . . but for this purpose, no person is to be treated as not habitually resident . . . who is''

in one of the categories that follows. One can work out the number of times that ''not'' is used, with the benefit of a calculator, but one could then tie oneself up in nots. The way in which the regulation is expressed presents difficulties, but I suspect that it has an underlying logic and precision.

I shall give credit where it is due: the Department has done its best to produce further information in the synopsis of the regulations, on which I suspect that the Minister, or her speechwriters, worked heavily, and in the letter sent out following Royal Assent. I was interested in that letter—I appreciate that this point may be slightly wide of our debate—which reached us today and contained news of progress on the Pension Service. Some 11 centres have already been designated and she says that they will all be operating by October. However, the small print—one must always read the small print with this Government—suggests that not all of them will necessarily be in full application,

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because they might not take claims, although they may be able to do other things. Can she say something about that progress?

I welcome the fact that the Department is prepared to hold a seminar to brief hon. Members on the regulations. Our common interest must be to ensure that, regardless of whether we agree with them, they are properly understood and we know how to deal with them on behalf of our constituents.

I turn now to the substance of these meaty regulations. The Minister knows that we had several protracted debates on persons not resident in Great Britain—it became something of an obsession of mine. A moment ago, my hon. Friend the Member for Canterbury invited me to dilate on the provisions under regulation 2, which relate to those who are, and those who are not, to be treated as residents in the UK. The three categories of exclusions relate to persons who are to be treated as being in Great Britain even though they are not habitually residents here. They are migrant workers, refugees and those who have been granted exceptional leave to remain. Those categories appear to exclude persons who are asylum seekers—those who have not attained a definition of their status. Can the Minister clarify that?

The concerns that we expressed in Committee on the primary legislation related much more to those persons temporarily absent from Great Britain. The Minister said, after considering the assessment period and the large number of people—estimated to be upwards of 5 million—who will be entitled to benefit from the pension credit, that things would proceed simply, that there would not be weekly means tests, and that people would have an unintrusive assessment period that would normally run for five years. Let us wait and see.

I have some doubt about the provisions under regulation 3, which deal with persons temporarily absent from Great Britain. I do not know how much work the Department and the Minister have done on persons who absent themselves temporarily, which includes potential or actual pension credit claimants. It seems to me a perfectly normally thing for a retired person to go away on an overseas holiday. That is a welcome development. There may be other reasons to travel, but I shall confine myself to the holiday. It became the practice, although it may not happen much at the moment—it depends on what happens to interest rates and exchange rates—for people to go abroad for months at a time and then return to the United Kingdom. The Government are obsessed with the idea that if their income had fallen, they would be entitled to more pension credit on returning. Whether or not they lose because their income has risen or fallen, there will be a problem if they are absent for more than four weeks, because they will have to reapply.

It would be helpful if the Minister would confirm to the Committee that she has understood that that might be a problem, give an estimate of the scale of the problem and explain how she will try to make the process as smooth as possible.

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