Third Standing Committee
on Delegated Legislation
Tuesday 10 June 2003
[Mr. Peter Pike in the Chair]
Draft State Pension Credit (Decisions and Appeals—Amendments) Regulations 2003
The Parliamentary Under-Secretary of State for Work and Pensions (Maria Eagle): I beg to move,
That the Committee has considered the draft State Pension Credit (Decisions and Appeals—Amendments) Regulations 2003.
It is a pleasure to be serving under your chairmanship in this Committee, Mr. Pike, even if it is a little hot and sweaty this afternoon. By the time we have finished dealing with this issue, we will—I hope—be more enlightened and less hot and sweaty.
Having looked at the matter, I am satisfied that the regulations are compatible with the European convention on human rights. Although the regulations appear dense and difficult at first reading, they form a small but none the less essential part of the legislative framework for pension credit. They deal with the right of appeal against certain decisions on pension credit, housing benefit and council tax benefit. The legislation provides that all decisions attract the right of appeal to a tribunal, unless otherwise prescribed. My comments focus on the ''otherwise prescribed''.
The effect of the draft regulations is to preclude the right of appeal against administrative decisions on what constitutes a valid claim for pension credit and on the time and manner of pension credit payments. That will simply bring pension credit into line with the rest of the social security system. The draft regulations are also designed to avoid a second right of appeal arising where a local authority uses the Pension Service's assessment or estimate of income or capital for housing benefit or council tax benefit purposes.
The regulations were not considered with the main set of regulations subject to the affirmative procedure—the State Pension Credit Regulations 2002, which, as those who followed the matter closely will remember, were considered in Standing Committee on 8 July 2002—because they are consequential on later sets of regulations subject to the negative procedure.
Let me say a few words about the specific regulations. Regulation 2 amends the Social Security and Child Support (Decisions and Appeals) Regulations 1999 to provide that there shall be no right of appeal against decisions made on pension credit pursuant to regulations 4D, 4E and 26B of the Social Security (Claims and Payments) Regulations 1987. Those provisions were inserted by regulation 4 of the State Pension Credit (Consequential, Transitional and Miscellaneous Provisions) Regulations 2002, which were made on 4 December 2002 and laid before Parliament on 10 December 2002.
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Regulation 4D specifies that a claim for pension credit need not be made in writing, but that if it is the claim must be made on an authorised form or in such other written form as the Secretary of State accepts as sufficient in any particular case. The regulation also specifies that a claim is not valid unless a written statement of the claimant's circumstances provided by the Secretary of State is approved by the claimant.
As Committee members will be aware, all social security benefits are subject to statutory requirements on what constitutes a valid claim, so there is nothing new or unusual about what is being done. In the entire system, there has never been a right of appeal on whether a claim is valid; thus, the regulations will not differentiate pension credit from other benefits.
Regulation 4E provides that a person may make a claim for pension credit at any time within the four-month period before reaching the age of 60. The provision does not apply currently to the minimum income guarantee, for which people have to wait until they are 60 before they can make a claim. The provision has been introduced into the pension credit system to align the rules for claiming with the rules that apply to the state retirement pension. Clearly, it would be inappropriate—and a bit daft, in my view—to have a right of appeal against a decision that a claim was not valid because it had been made more than four months before a person reached pension age. The obvious solution in such a case would be to claim at the right time, within the time scale.
Regulation 26B prescribes the time and manner of payments of state pension credit. There is nothing new or unusual about the regulations. All social security benefits are subject to rules about the day on which benefit is paid and whether it is paid in advance or in arrears.
Overall, regulation 2 brings pension credit into line with the current provisions for minimum income guarantee and all other social security benefits in terms of rights of appeal on administrative aspects of a claim. That is basically what the regulations are about. The decisions in question do not concern the amount of money to which a person is entitled; they simply deal with what constitutes a valid claim for pension credit, and when and how that money is paid.
I should point out that there is a difference between the requirements for what constitutes a valid claim for pension credit purposes and those for other provisions in the social security system. Stated simply, a valid claim for pension credit purposes and the relevant requirements set out in the regulations are less prescriptive than those that apply to the minimum income guarantee under regulation 4 of the Social Security (Claims and Payment) Regulations 1987. Most notably, regulation 4D does not include a requirement that supporting information and evidence must be included with a claim before it can be considered valid. In that sense the arrangements that we are making are easier for people to deal with than has perhaps been the case in the past.
Regulation 3 relates to the interaction between pension credit and housing and council tax benefits. Some of us are veterans of the passage of the pension
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credit legislation, and they will recall—as will others who followed it closely in Hansard—that pension credit comprises two elements. I shall not go into all the complexities of the formula and how it is worked out, as that would be out of order. The two elements are the guarantee credit, which tops pensioners' income up to a minimum of £102 for a single pensioner and £155 for couples, and a savings credit element to reward those who have worked hard to save modest amounts.
Pensioners who get the guarantee credit will be entitled to full housing and council tax benefits, as happens now with the minimum income guarantee. That will mean that local authorities do not need any information about income or savings to process claims for housing and council tax benefits. Pensioners who get only the savings credit will not automatically qualify for full housing and council tax benefits. However, the applicable amounts have been increased to reflect the maximum amount of savings credit, to ensure that pensioners do not see their gains in pension credit clawed back through reductions in housing and council tax benefits. Those who followed the passage of the legislation will recall our discussions about that.
The housing and council tax benefit rules on income and the treatment of savings have also been aligned with those that apply to pension credit. Where a pensioner or pensioner couple get the savings credit but not the guarantee credit, the local authority will use the Pension Service's income assessment to calculate housing and council tax benefit entitlement. Hopefully, that will ultimately mean less work for the local authority and less form filling for the claimant. The Pension Service will relay details of pension credit income assessments electronically, so that local authorities can retrieve them from their remote access terminals.
Regulation 3 amends the Housing Benefit and Council Tax Benefit (Decisions and Appeals) Regulations 2001 to preclude a second right of appeal where, in cases in which only the savings credit element of pension credit is payable, a local authority uses the Pension Service's calculation or estimate of income for housing or council tax benefit purposes.
Mr. Julian Brazier (Canterbury): Will the Minister clarify one point? In the case of someone who has simply given up and not made a pension credit application at all, or perhaps has made one but has given up and not seen it through, will the local authority in principle be able simply to assume that the person is not eligible for pension credit?
Maria Eagle: I do not think that the local authority would make calculations for benefit administration purposes in theoretical terms on questions about whether somebody might be eligible; it must deal with the facts that are before it. If a claim is made, and there is an assessment, the authority is entitled to use it. If no claim is made, it cannot make an assessment of whether a claim would succeed. However, many local authorities provide welfare benefits advice. In that way they will be able to assist those who we hope will claim their pension credit entitlement.
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Regulation 3 does not affect the original right of appeal—against the original decision on pension credit. That right remains. We do not seek to remove any right of appeal against the amount awarded. We simply want to ensure that there is a single right of appeal, and to prevent multiple rights of appeal through the back door. The regulations are a lot simpler than they may appear, and I commend them to the Committee.
Mr. Brazier: I, too, want to say that it is a pleasure to serve under your chairmanship, Mr. Pike. Thank you for your early decision that we may take our jackets off. This is, as the Minister said, a hot and sweaty Room. I am sorry to say that I might bring a little more heat to the proceedings.
The Minister's speech did not shed quite as much light on the measures as I would have liked. During her speech she repeatedly used—in good faith, I am sure—the words ''simple'' and ''simply''. However, even though I did not have the pleasure of serving on the relevant Standing Committee, one thing that was clear from the original Bill was just how complicated pension credit is.
I will start with regulation 2(a), which is about making a claim for state pension credit and making such a claim before reaching the qualifying age. I hope that the Minister can set my mind at rest about whether the regulations—which might at first appear to be relatively innocuous—have the potential to do harm to those whom the Government want to help. The first paragraph of the new regulation 4D that is to be inserted into the Social Security and Child Support (Decisions and Appeals) Regulations 1999 states:
''A claim for state pension credit need only be made in writing if the Secretary of State so directs in any particular case.''
At first glance, the measure appears liberating because it aims to release pensioners from form filling, but could not it have the net effect of giving the Secretary of State the power arbitrarily to decide how applications for state pension credit should be made in the future?
I will be more specific—regulation 4D states:
''(1) A claim for state pension credit need only be made in writing if the Secretary of State so directs in any particular case.
(2) A claim is made in writing either
(a) by completing and returning in accordance with the instructions printed on it a form approved or provided by the Secretary of State for the purpose; or
(b) in such other written form as the Secretary of State accepts as sufficient in the circumstances of the case.''
Do not the regulations give the Secretary of State the power to change the method of application? Inserting regulation 4D into the 1999 regulations could mean that pensioners who have missed out on what they are entitled to will have no right of appeal against any decision arising from the manner of the application, however flawed that manner may be.
That is not a quibble. In post offices throughout the country there is a method—PIN pads—through which pensioners can apply for benefits. The system has
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barely been introduced, but already it needs to be altered.