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Lord Mackay of Ardbrecknish: My Lords, I am happy to help the noble Baroness on this point. I think I said at one stage that I was talking about moving off income support or jobseekers' allowance. Perhaps I did not repeat that later, but that is the position.

Baroness Hollis of Heigham: My Lords, I am happy to have the Minister's reassurance. It is clear that a lone parent entering work has additional costs and worries from clothing to transport to childcare, as well as the worries of coming off a low but reliable income. To that extent, the bonus is of considerable help.

We also welcome the fact that the bonus signals that the parent with care is receiving the equivalent of a modest disregard. However, we regret that it is not a proper, true maintenance disregard, however modest, which is payable to all lone parents with care, including those with very young children who not unreasonably put their parenting responsibilities first. We also regret that it is tied to child maintenance paid. We understand the thinking behind that but it means that the bonus of a lone parent returning to work will depend not on her returning to work but on whether the absent parent is himself in work and has therefore paid child maintenance. Otherwise it means that his poverty will reinforce hers; if he is on benefit there will be no bonus for her. I would love to be wrong about that, but I understand that if he is on income support and therefore paying only a relatively small disregard--in other words, the top-slicing of his income support far below £5 per week at £2.50--I do not see how that can roll up to the job bonus which the Minister indicated. Therefore, whether she receives the bonus depends not on whether she is in work but on whether he is in work. That turns the whole job bonus into a lottery, which is regrettable. I do not have an easy answer but it presents a genuine problem to which I hope the Minister can respond in reply.

My second point relates to the Minister's remarks about work incentive. He is right in saying that we should help lone parents with transitional costs to encourage them with the risks of taking up a job. We welcome that. However, given that philosophy which I entirely share, why in the Budget did the Government first choose to freeze and then propose to abolish the lone parent benefit, which, because it is not means tested can be carried by the lone parent into work? It is therefore a positive incentive for her to find work knowing that benefit--in other words, a platform--is securely in place. Why are the Government producing a child support bonus on the one hand while taking away a similar well established benefit which is doing a similar job--that is, the lone parent benefit--on the other hand? Give with one hand and take away with the other--apparently nowhere is that more true than in child support. The three cap trick is a good trick for conjurers at a children's party but it is not a sound basis for Government policy as regards the children of lone

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parents. It sends out a signal that government value a lone parent who works more highly than a lone parent who parents properly. As the Social Security Advisory Committee stated:

    "We believe in looking a work incentives for lone parents. The legitimate need to support the parenting role rather than encouraging the parent to work should be given due weight".
Potentially the welfare of 2.7 million children depends on the conclusions which the Government reach about benefit provision for lone parents. I repeat that we welcome the bonus but we wish that it were more widely extended and that it did not appear to be the lottery that it apparently is.

8.30 p.m.

Earl Russell: My Lords, the Minister made one quite serious mistake in the course of introducing his regulations. He said that the noble Baroness and I wished to go further and have a maintenance disregard. He is right that we wish to have a maintenance disregard but he is wrong to suppose that that is going further. It is travelling in a quite different direction.

We on these Benches are strongly in favour of incentives to return to work. But that is a second priority. The first priority is to ensure adequate levels of support so that people can eat. That is the problem to which we were addressing the maintenance disregard.

As was pointed out in 1991, the problem is that, because of the operation of passported benefits, receiving maintenance puts the women below income support level. The back-to-work bonus has never done one thing to meet that and therefore it is addressing the wrong problem. I have one or two more points to make about it.

First, it takes four years to reach a bonus of £1,000. I wonder whether that is a very realistic incentive. Secondly, it applies only to full-time work, whereas more and more jobs are part-time. Is the Minister prepared to consider doing anything for people who get part-time work? Thirdly, it provides only for getting into work. What happens to the person who gets into work, banks the bonus and leaves after a week? With the Minister's attitude to sin, he might have foreseen that possibility. I am surprised that he has not. Fourthly, I agree with the noble Baroness, Lady Hollis, about the burden on the CSA of budget cuts during the changed programme. Does the Minister really believe that giving the CSA a large extra job of work at the moment is expedient?

Lord Mackay of Ardbrecknish: My Lords, the noble Baroness described the disregard as modest. Indeed, it certainly starts off as modest but it builds up, as the noble Earl pointed out, over quite a long period of time to £1,000. The point is that it builds up, so at any stage between the first week and after almost four years it will be between £5 and £1,000. It depends on how long the parent with care is receiving maintenance payment and building up the bonus before she goes back to work. That is entirely her decision, but we all know and have agreed that one of the best ways to improve the living standards of parents with care and their children is for them to find and return to work. We are also agreed that sometimes the most difficult part of that operation is the transition. That is why we have devised a number of ways of helping

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people to get back into work. This is one of them, together with the other bonus in the jobseeker's allowance which helps people who work part-time while on benefit and allows them to put aside some money and have up to £1,000 when they move into full-time work.

I believe that the key to the problem is coming off income support or jobseeker's allowance. I do not believe that it is so much the definition of work but I will check that. I believe that I am right in saying that it is coming off either of those benefits.

We are tying the bonus to child maintenance paid. We are doing so because, as I said, we want to give incentives to both parties. By tying the bonus to child maintenance paid we hope to give an incentive to the absent parent to encourage him, usually, to adopt a regular pattern of maintenance payments in the interests of the parent with care and of the child, so that if the parent with care goes into work some of the money which the absent parent has paid over will be available for that bonus. Therefore, we see this as a double incentive. It will help and provide an incentive to a parent with care moving off benefit and into work. We also hope that it will act as an incentive to an absent parent to ensure that he pays the maintenance and that it is not assumed to be notional, whether paid or not. It does have to be paid--

Baroness Hollis of Heigham: My Lords, perhaps I may ask the Minister to clarify the point. Does it mean that if the absent parent is on benefit it does not count as child maintenance paid and therefore, for that period of time, the mother though going back into work will not be eligible for any job bonus?

Lord Mackay of Ardbrecknish: My Lords, I was just coming to that point. I was trying to be as logical as possible. The noble Baroness asked about the absent parent who was on benefit. Of course, that absent parent will normally pay a contribution to maintenance of £4.80 a week. While that may not be £5, it will build up towards the bonus. I hope that that is a satisfactory answer.

I hope that I have answered all the points arising in respect of the child maintenance bonus regulations. I commend them to the House.

On Question, Motion agreed to.

Social Security (Incapacity for Work and Miscellaneous Amendments) Regulations 1996

8.40 p.m.

Lord Mackay of Ardbrecknish rose to move, That the draft regulations laid before the House on 2nd December be approved [5th Report from the Joint Committee].

The noble Lord said: My Lords, the new structure of benefits for people who are incapable of work have been in place for over 18 months now. These amendments introduce a number of tidying up measures and points of clarification. In addition they address the effects of a recent decision of the High Court which concerned the

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beneficial provision which allows people who would otherwise fail the all work test to be treated as incapable of work in exceptional medical circumstances.

The introduction of incapacity benefit was an important reform of a major area of benefit provision. With any reform of this magnitude it is inevitable that there will be the need for some fine-tuning in the light of practical experience. These amendments affect three sets of the regulations which contain the detailed rules for determining entitlement to benefits for incapacity. None, however, introduces any significant changes to the Government's established policy in this area.

Most of the amendments before us are aimed at achieving greater clarity, and a more consistent application of the all work test. Some are directly beneficial; for example, we are widening the provision which prevents incapacity benefit recipients being excluded from benefit solely because they are caring for a close relative. The definition of close relative is being expanded to include, among others, grandparents and grandchildren.

The new all work test of incapacity is the key to the reforms that we introduced last year. Our experience of the procedures so far has shown that, in a few areas, the wording of some of these activities and descriptors needs to be more precise.

In improving the wording of these provisions our aim has been to ensure that they reflect more accurately the original policy intention. I assure noble Lords that none of these improvements tightens the test beyond this original policy intention, which was set out in a report, The Medical Assessment for Incapacity Benefit, published before the new arrangements came into force in April 1995.

It might be useful if I illustrate this with an example. One of the functional areas assessed under the all work test is manual dexterity. The activities specified measure a person's ability to perform various tasks with his hands. We want to make it clear that the ability to turn a tap refers to an ordinary sink tap; and the word "control", in the phrase "control knobs on a cooker", is intended to be an adjective, not a verb.

The High Court decision which we are addressing concerned the provision which allows a person who fails the all work test still to be treated as incapable of work if the examining doctor considers that exceptional medical circumstances exist. This is, of course, a medical question. The High Court decided it was wrong to make the doctor's opinion binding on the adjudication officer, with the result that lay adjudication officers and appeal tribunals must apply the criteria. We are therefore amending the provision to define more clearly the circumstances in which it should apply; and to ensure that, while the opinion of the examining doctor is not binding, decisions are still based on medical evidence. We believe this is essential, given that we are talking about a specialist medical question. But an additional safeguard has been built in. Adjudication officers will now be able to consider other medical evidence--for example from the claimant's own doctor--when applying the provisions.

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Finally I should like to remind the House that the Government's reforms in this area were introduced against the background of a rapid and unexplained growth in numbers receiving the former invalidity benefit. We believe the measures we have introduced address these developments in a fair and balanced way. The regulations before us today introduce some important improvements, and I commend them to the House.

Moved, That the draft regulations laid before the House on 2nd December be approved [5th Report from the Joint Committee].--(Lord Mackay of Ardbrecknish.)

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