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Lord Mackay of Ardbrecknish: My Lords, the purpose of the amendment is to allow those people who are found capable of work under the all-work test in incapacity benefit, but who have scored one or more points under the test, to receive a contribution-based jobseeker's allowance for up to 364 days rather than the l82 days specified in the Bill.

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I am almost tempted to say that from my re-appearance at the Dispatch Box the noble Lord, Lord Carter, will realise that I do not consider that would be right for a number of reasons. It seems to be my noble friend who has been giving all the concessions, and so on, for the last little while.

The basic principle of contribution-based jobseeker's allowance is that it is a personal entitlement paid for up to six months, irrespective of the claimant's personal circumstances. Therefore, I do not believe that it is appropriate to adjust the basic conditions for individual groups. However, claimants can receive certain disability benefits on top of their contributory allowance; in particular, disability living allowance. Where there is continuing need at the end of the six months' contributory benefit period, income-based jobseeker's allowance will be available for all those who require it and for as long as it takes to find work.

We recognise that disabled claimants may have special needs and difficulties in finding work. But extending the contributory period is not the answer. The best way to help those in this group, as for all unemployed people, is to get them back into work. I shall not pray in aid the disability Bill that is soon to come to this House. We shall have more than enough time to discuss it. However, I must point out—and perhaps I shall have to do so on a number of occasions—that the figure of 20 per cent., which the noble Lord gave as a limit, is not an accurate reflection of the real situation as regards employees. Eighty per cent. of all employees will be covered by the Bill because so many work for the larger companies.

The Employment Service provides a wide range of services and programmes to help disabled people and their employers, giving unemployed disabled people priority for a place on all main employment and training programmes for which they are suitable. In response to my noble friend Lord Swinfen, I mentioned them in some detail earlier. I do not wish to go over them all again but I remind noble Lords that 53,000 unemployed disabled people were helped into work by the Employment Service in 1993-94. Furthermore, during the next three years an extra £71 million in resources will be going into the Employment Service to provide a package of help to enable those people affected by the introduction of incapacity benefit to have early access to the most appropriate Employment Service provision.

I regret to say that for all those reasons we believe that it would be inappropriate to extend the period of entitlement to contribution-based JSA to this group. I hope with that explanation the noble Lord will withdraw his amendment.

Lord Carter: My Lords, I thought that the Minister was going to surprise me but, obviously, he is not going to do so. Claimants receive DLA in any event, and therefore I do not see what that has to do with the amendment. All the evidence points to the fact that disabled people do not get back into work as quickly as other people. The Minister has no evidence to show that the facts that we have given are wrong.

I am not surprised that he did not quote from the Disability Discrimination Bill. I do not believe that he was stopped from doing so by the time of night but

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because he realised that the argument which the Government produced when they called that Bill in aid in the other place will not work in this case. He said that 80 per cent. of employees will be covered. That means that 20 per cent. will not be covered. If the proportion is that small, why not include them? We shall discuss that matter when we debate the Disability Discrimination Bill next week.

I am disappointed by the Minister's reply. I believe that we made a strong case but I am not surprised by the rejection. I beg leave to withdraw the amendment but we may wish to return to the matter on Third Reading.

Amendment, by leave, withdrawn.

Lord Swinfen moved Amendment No. 96A:

Page 35, line 40, at end insert:
("(e) for occupational pensions to be disregarded, in the case of a disabled person").

The noble Lord said: My Lords, under current unemployment benefit rules, people aged 55 and over have their benefit reduced pound for pound if they also receive an occupational or personal pension of more than £35 per week. The proposal in the White Paper for contributory jobseeker's allowance is to remove the age threshold and to raise the pension level to £50. This amendment concerns disabled people, some of whom may have occupational pensions awarded on the basis of early retirement on grounds of ill health. It seeks to disregard such pensions when calculating contributory jobseeker's allowance.

Written Questions were put to the Minister in the other place in order to ascertain how many of the estimated 150,000 people moving from incapacity benefit to jobseeker's allowance in the year 1996-97 will also have an occupational or private pension. The Minister stated that the information is not available, as reported in the Official Report of the other place on 7th March at col. 169 and again, 10 days later, at col. 744.

However, according to the Department of Social Security's own research—in its Report No. 20—over two-thirds of the sample of people receiving invalidity benefit did not receive an occupational pension. Only an estimated 38 per cent. of invalidity benefit claimants received an occupational pension at an average of £60 per week, as reported in the Official Report of the other place on 8th February last year at col. 210.

If that percentage of claimants is reflected in similar proportions in the numbers expected to sign on in 1996-97, about one-third of such claimants—about 50,000 people—could have their contributory benefit reduced or completely withdrawn. For example, an average £60 pension would reduce contributory JSA by £10 per week.

The removal of an age threshold means that people of any age could be affected. That could have the greatest impact on older disabled people moving from incapacity benefit to JSA. The chances of a disabled person having an occupational pension increases with age, with 55 per cent. of men claiming invalidity benefit having some occupational pension payment after the age

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of 55, compared with only 5 per cent. before the age of 45, as reported in the House of Commons' Hansard of 7th February last year at col. 32.

In Committee in another place the Minister argued that the pension level should be the determinant rather than age, as reported in the Official Report of Standing Committee B in the other place on 7th February this year at col. 248. However, age is relevant to disabled people. Indeed, the greater likelihood of people over the age of 45 having an occupational pension was one of the reasons put forward by the Government during the passage of the Social Security (Incapacity for Work) Act for reducing the age from which the age allowances are payable with incapacity benefit to below that age.

While only 30 per cent. of people aged between 45 and 54 claiming invalidity benefit received an occupational pension, as reported at col. 32 on 7th February last year in the House of Commons' Hansard, such people in that age group moving from incapacity benefit to JSA could have their benefit reduced as a result of this provision.

Someone with a working spouse or with savings above the limit, could also be excluded from income-related JSA, leaving someone with no benefit at all from day one. I beg to move.

10.45 p.m.

Lord Carter: My Lords, I do not wish to go through the whole argument on this amendment, because it is complicated and has been put extremely well by the noble Lord. I hope that the Minister will deal with the illogicality which the noble Lord pointed out; namely, that the arguments used by the Government when we debated the incapacity for work legislation is the reverse of the argument which they are likely to use on this amendment.

Lord Mackay of Ardbrecknish: My Lords, since 1981, there has been some form of abatement in unemployment benefit for occupational pensions. This is, therefore, a long-standing principle in contributory benefit, and one which is widely accepted. That principle should, we believe, apply to disabled people who receive occupational pensions in the same way as it does to other claimants. There is no reason to treat disabled people who are unemployed and looking for work differently from other jobseekers.

We are, however, increasing the level of disregard that applies to those receiving contributory-based jobseeker's allowance with an occupational and personal pension from £35 to £50 a week. Of course, that will be applicable to all jobseekers on the contributory-based JSA. That provides a positive incentive to people to make provision for their own retirement and allows for a disregard of a substantial part of that pension. Pension payments will continue to be taken into account fully in income-based JSA, as they are in income support for all claimants, including disabled people.

We believe that the removal of the 55 age limit is fully justified. The current limit is arbitrary and inequitable. There is no reason to treat two claimants differently simply because one is 54 and the other is 55.

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We believe the financial resources available in JSA are better used in measures which will actually help disabled people in general into jobs, not in giving a special disregard for disabled people with an occupational or personal pension. There is an extensive programme of financial and practical help for unemployed, disabled claimants—which we discussed on a number of occasions this evening—over and above that given to the majority of claimants.

I recognise that pension payments are not taken into account in incapacity benefit. However, there is a wide difference in the nature of the two benefits, and as regards the situation of those claiming them. Contributory JSA is a short-term benefit paid to people to tide them over a period of unemployment. Everyone claiming JSA is, by definition, capable of work and is looking for work. In those circumstances it is right to carry forward the long-standing principle of abatement from unemployment benefit. Incapacity benefit, on the other hand, has to cater for those whose disabilities are long term and who are not, therefore, capable of working. With that explanation, I hope that my noble friend will feel able to withdraw the amendment.

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