Memorandum submitted by Civil Service
Pensioners' Alliance (CSPA) (PC 05)
INTRODUCTION
1. The Civil Service Pensioners' Alliance
has about 70,000 members in the UK, organised in 100 local groups.
We represent retired Civil Servants from every grade in every
Department and many of our members, especially those widows of
Civil Service pensioners, have very modest incomes and therefore
are likely to qualify for Pension Credit or be at the borderline.
A quarter of all Civil Service pensioners have pensions of less
than £2,000 a year, and a third of all the widows of Civil
Service pensioners have pensions of less than £1,000 per
year.
Experience of members
2. Generally speaking, the experience of
our members in claiming Pension Credit has been good. They have
either filled in the forms themselves or with the help of a friend
or relative, or they have used the call centres. No one has made
us aware of any particular problems with the forms, and our members
report that dealing with the call centres was straightforward
and the staff helpful and friendly. Members have generally reported
that they have received a speedy response to their claim.
Pension service speakers
3. Many of our local groups have asked for
Pension Service speakers to explain Pension Credit and other pension
services to their local meetings. They have all reported a high
degree of satisfaction in the Pension Service speakers, especially
in the way that they explained Pension Credit and other pension
services. Their ready availability and knowledge of the local
situation is an important part of the service.
4. We are also aware that the Pension Service
sends visiting speakers to a variety of locations where pensioners
gather, such as Local Authority retirement centres, drop-in centres,
Age Concern centres, and the feedback we have had is that the
service is appreciated and helpful.
Pension service visiting officers
5. We are also aware that the Pension Service
is prepared to visit people in their homes. Our experience of
this service is that it is very good. The Pension Service staff
were pleasant and helpful, giving advice and assistance about
other benefits as well. This resulted in members concerned getting
Pension Credit and where appropriate, Council Tax Benefit. As
a consequence, their quality of life has improved considerably.
We think this is a very valuable service that should be retained
and expanded. The knowledge and experience of local Pension Service
staff is crucial and is not available from leaflets or call centres.
Proposed staffing cuts
6. Therefore we are extremely concerned
about the impact of the staffing cuts in the Pension Service.
The loss of 30,000 staff from the Department of Work and Pensions
must have a significant impact on the quality of service offered
by the Pension Service. Earlier in our submission we commented
on the good quality of service members have reported, and would
be very concerned if this was to drop. We believe the Committee
should seek guarantees from the Pension Service that the quality
of service should not only remain but improve, especially the
facility of locally based Pension Service staff to get out and
about to talk to pensioners where they meet and visit them in
their homes.
7. The rules are so complex and so difficult
to understand that the expertise of Pension Service staff is vital
if this benefit is to be successfully delivered. Lack of common
knowledge about this benefit and its relationship to other benefits
is one of the reasons for its low take-up.
Confusion about relationship of various benefits
8. Many of our members, and also our local
representatives who assist them, report that there is considerable
confusion about the relationship between Pension Credit, Housing
Benefit and Council Tax Benefit. It is also clear from some of
the personal cases we have dealt with, that the Local Authorities
are also confused. In fact there have been occasions where following
up problems from members, we have got advice from the Pension
Service and gone back to the Local Authority, who have then changed
their decision. All the publicity regarding Pension Credit does
not properly explain the relationship between Pension Credit and
Housing Benefit and Council Tax Benefit. Leaflet PC1F briefly
refers claimants for Housing Benefit and Council Tax Benefit to
the local Council and leaflet PC1N briefly refers claimants to
Housing Benefit and Council Tax Benefit to the Department of Work
and Pensions. In fact, the only reference to Housing Benefit and
Council Tax Benefit in the publicity is that they are not counted
as income when assessing Pension Credit (but this only applies
when in receipt of Guarantee Credit). The publicity does not point
out that they will have to re-assessed if Pension Credit (the
Savings Credit element) is granted. Therefore, if the existing
rules regarding entitlement to Pension Credit are to continue,
there needs to be a much clearer explanation of the consequence
of receiving the benefit on other benefits. Many of our members
have been disappointed to find entitlement to Pension Credit has
reduced their Council Tax or Housing Benefit.
Proposed changes to entitlement
9. We would therefore like to propose that
entitlement to both the Guarantee Credit and the Savings Credit
elements of Pension Credit do not incur any penalties with Housing
Benefit or Council Tax Benefit. Currently only the Guaranteed
Credit does not affect other benefits. It seems contrary to the
principles of Pension Credit, which was designed to help those
on low incomes and reward those with small occupational pensions,
if by becoming entitled, they then lose other benefits. On the
one hand we currently have a group of Civil Servants working out
an entitlement to Pension Credit, and on the other hand another
group of Civil Servants who have to reduce existing benefits already
in payment, an unnecessary duplication of effort.
10. Under the current rules, women between
the ages of 60 and 64 are not entitled to the savings credit element
of Pension Credit. Women become entitled to the State Retirement
Pension at age 60 and usually have had to retire from whatever
occupational scheme they were in. This means that the aim of Pension
Credit, to help those on low occupational pensions, is not met
until they reach age 65. Until the equalisation of the state retirement
pension ages, it seems only right that women should be entitled
to the savings element of Pension Credit from age 60. The rules
perpetuate poverty in an important and disadvantaged sector of
the community.
11. Those not in receipt of a full basic
state pension will only receive savings credit on savings and
other sources of income above the savings credit threshold, set
at the level of the full state pension, therefore, they will not
receive any benefit on their savings or other income below that
threshold. This will adversely affect all those who do not receive
a full State Pension, and have a small occupational pension or
savings, the majority of whom are women. The solution would be
to calculate the savings element of Pension Credit on the actual
amount of savings or occupational pension increase without taking
into account the level of state retirement pension.
Care home residents
12. We are also concerned that supported
residents living in a care home, only receive a maximum of £4.65
per week in Pension Credit, whereas if they had either been living
in the community or self-funding, they might have been entitled
to anything up to the maximum.
13. Residents of care homes, whose capital
is rapidly decreasing because it is being used to pay for their
care, are entitled to have their Pension Credit entitlement reviewed
every time their capital reduces by £500. This can occur
frequently in view of the high charges of care homes. Also, the
Local Authority need to be aware two to three months before capital
sinks to the lower limit so that they can start providing support,
otherwise Pension Credit claimants could use up capital unnecessarily.
Greater publicity needs to be given to these facts, as they are
not well known.
14. The entitlement to Severe Disability
Allowance and its relationship to Pension Credit is not well known.
Publicity about this benefit is difficult to come by and needs
to be improved.
15. It is also not appreciated that there
is now no upper capital cut-off limit. Whilst this can be worked
out for care residents and is about £55,000, again more publicity
is needed and could improve take-up.
16. These are all powerful arguments for
increasing the number of local Pension Service staff so that they
can visit care homes and explain the complexities of the system
to those concerned with the residents' welfare.
CONCLUSION
17. We hope the Committee will find our
observations and suggestions on the working of Pension Credit
helpful. This is a very complex benefit and its relationship with
other benefits is not easily understood. If the Government are
to persist with this policy as their way of tackling pensioner
poverty, the rules need to be simplified and improved as we have
suggested. There also needs to be more local Pension Service staff
available to visit and assist claimants, not less as the Government
seem to be proposing.
There is no doubt that many pensioners' lives
have been improved by Pension Credit and as a short-term strategy
for tacking pensioner poverty it has worked for some. There remain
those who are entitled but have not claimed and this problem needs
to be solved.
There also remains the longer-term question
of having more than half the UK pensioner population dependent
on means tested benefits, incurring extensive administrative costs.
We believe a decent level of basic state pension for all to be
a better solution.
Brian Sturtevant
Civil Service Pensioners' Alliance
29 September 2004
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