Supplementary memorandum by the Department
for Work and Pensions (LGR 30(a))
I was pleased to have the opportunity to give
evidence to your Committee's inquiry into Local Government Revenue
on 18 May.
During the hearing, I promised to send you further
information on a number of the issues that were discussed. This
information can be found in the notes attached here as annex A.
I hope the attached notes are helpful to your
inquiry and look forward to reading your report in due course.
Chris Pond MP
Annex A
1. DETAILS ON
REGIONAL AND
LOCAL VARIATIONS
IN COUNCIL
TAX BENEFIT
TAKE-UP
Whilst the Department for Work and Pensions
produces annual percentage take-up statistics for the main income-related
benefits including Council Tax Benefit (CTB), the data relates
only to national, ie Great Britain wide, level. This is because
the data cannot reliably be reproduced on a sub-national level.
Estimates of take-up are dependent upon household surveys and
as such are subject to the imperfections in data that arise when
people am responding to surveys. The statisticians can allow for
such imperfections at national level, where estimates are presented
as within ranges (66%-72% being the latest GB estimates). However,
this would pose substantially larger problems at regional level
without increasing the sample size, which is currently 25,000
households a year.
Take-up of CTB is lowest among owner occupiers
and it is likely that those regions with a high concentration
of owner occupiers will have a lower rate of take-up compared
with the national average.
We will be monitoring changes in caseload numbers
at regional and local authority level over the next year to assess
the impact of the various structural changes to CTB, the introduction
of Pension Credit, and the promotional activity taking place on
the numbers actually claiming CTB.
2. HOW MANY
PENSIONERS WOULD
BENEFIT IF
ALL OLD
AGE PENSIONER
HOUSEHOLDS RECEIVED
THE £100 ONE-OFF
PAYMENT RATHER
THAN JUST
HOUSEHOLDS WITH
PEOPLE AGED
70 AND OVER?
AND HOW
MUCH WOULD
THIS COST?
Extending entitlement to the £100 payment
to all pensioner households in Great Britain would result in approximately
7.5 million households receiving a payment at an additional cost
of around £250 million. This would mean approximately 2.5
million extra households benefiting from the payment.
Source: data from the latest Family Resources
Survey (2002-03), and calibrated to Winter Fuel Payment administrative
data. Caseloads are rounded to the nearest 100,000. Costs are
in 2004-05 price terms rounded to the nearest £10 million.
Figures are for Great Britain only and exclude pensioners living
in Residential Care and Nursing Homes.
3. WHERE THE
EXTRA MONEY
WOULD COME
FROM IF
COUNCIL TAX
BENEFIT TAKE-UP
INCREASED; WOULD
IT COME
FROM THE
DEPARTMENTAL CONTINGENCY
FUNDS OR
FROM THE
TREASURY?
The Annually Managed Expenditure (AME) forecasts
take account of new policies or operational changes which are
likely to effect caseload and/or average awards. However, if there
was evidence that CTB programme expenditure (AME) costs were higher,
or likely to be higher than that forecast at the Budget, a bid
for extra AME resources would be made through the supplementary
bidding process, which would then be put to Parliament for a vote.
Treasury also builds in to the AME forecasts
its own "AME margin" on top of the Department's forecasts,
which would normally cover for such eventualities, although this
money is not voted to particular purposes by Parliament until
a supplementary estimate is submitted.
It is important to note that where entitlement
to a benefit exists, there is a legal obligation to ensure that
that the benefit is paid.
4. HOW MANY
PENSIONERS IN
RECEIPT OF
PENSION CREDIT
ARE ALSO
RECEIVING COUNCIL
TAX BENEFIT?
Them are around 3.25 million pensioner benefit
units who are eligible for both CTB and Pension Credit. Around
1.9 million pensioner households have or will become newly eligible,
or eligible for more, CTB as a result of the introduction of Pension
Credit.
DWP does not have current figures for the number
of pensioner households that are receiving both Pension Credit
and CTB. This is partly due to the fact that CTB is administered
by Local Authorities so data has to be collected from 408 separate
local authority systems, many of which would have problems in
separating working age people from the pensioner recipients of
CTB.
However the Department expects that pensioner
take up of CTB is increasing as The Pension Service is already
doing much to promote CTB take-up. When a person calls the Pension
Credit Application Line staff identify if they might be eligible
for Housing Benefit and Council Tax Benefit (HB/CTB) and issue
claim forms to everyone who wishes to claim. The Pension Service
local service also considers eligibility to HB/CTB as part of
its holistic approach to take-up of entitlements, helping people
fill in their HB/CTB claim form during home visits.
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