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Baroness Hollis of Heigham: The noble Lord will know that the precise terms of what counts as "habitual residence" were changed by the court case of Swaddling. That encouraged the Government to progress with their review of the habitual residence test. It did indeed change. As a result, all the guidance that had to go out and so on had to be perfectly properly changed. These things are not as fixed and non-variable as the noble Lord suggests. He seemed to be suggesting that the only regulations ever needed were those that dealt with numbers, which might have to change. Everything else would remain constant. No, that cannot be true. Forms of income, of annuity and all those kinds of things change every time different models come through.
The Government, without troubling the House continually with primary legislation, need to be able to have the flexibility to bring these matters forward with regulations, which, none the less, will remain properly scrutinised by your Lordships' House.
Lord Higgins: I was not suggesting that this applied only in cases of numbers. That is not my position. The noble Baroness is fortunate in having a court case which led to her having to change the question of who is or is not in Great Britain. If that had not arisen, she would find it more difficult to make her point. But I take and accept her point.
Amendment No. 8 concerns regulations which provide for whether someone should continue to be entitled to a pension credit if they are temporarily absent from Great Britain. Perhaps the noble Baroness can give us some indication as to how long someone has to be absent and so on. In that regard there probably are some helpful court cases and other financial legislation relating to whether someone is habitually resident and so on. No doubt the noble Baroness can confirm that matter.
The other point is the question of whether or not someone is in Great Britain. Perhaps the Minister can make clear for us what the situation is with regard to Northern Ireland. In particular, if someone visits Northern Ireland, are they said to be inside or outside Great Britain? These are all fairly clear-cut points compared with some of the complexities elsewhere in the Bill. It would be helpful to have the Government's view on that issue and whether it would not be better to deal with it on a United Kingdom rather than on a Great Britain basis. I beg to move.
Baroness Hollis of Heigham: The noble Lord has described his amendments with his usual clarity. They all concern the residence and presence conditions that need to be satisfied in order to qualify for pension credit. Amendment No. 7 removes the provision allowing additional residence conditions beyond mere
physical presence in Great Britain to be a prerequisite for receipt of pension credit. Amendment No. 8 limits entitlement to pension credit only to periods of presence in Great Britain. Amendment No. 9 has the effect of preventing payments of pension credit during periods of temporary absence from Great Britain—namely, England, Scotland, Wales—while the person remained in the United Kingdom. As the noble Lord said, that is the Northern Ireland amendment.Amendment No. 7 as tabled has the effect of requiring a person to be physically present only in Great Britain in order to be able to claim pension credit. It is the mirror opposite of the amendment moved by the noble Baroness, Lady Barker. The argument remains the same. We believe that it is appropriate to have the habitual residence test, which is a stronger test than merely being physically present. I can elaborate on that matter if that does not answer the noble Lord's point.
Amendment No. 8 has the effect of removing possible entitlement to pension credit for periods of temporary absence from Great Britain. As I said to the noble Baroness, we are permitting that to be continued for four weeks where someone is away and eight weeks when accompanying a family member on a trip associated with illness and the like. I hope that point is covered.
Amendment No. 9 has the effect that pensioners who normally live in England, Scotland or Wales but who go to Northern Ireland for a short time—perhaps to visit relatives—would have to give up their pension credit while away and to claim it back again when they came home. That is the import of this probing amendment.
Our intention is to mirror the current rules which apply to income support. Although it is a basic condition that people are in Great Britain in order to qualify for pension credit, payment can continue for up to four weeks if they are temporarily out of the country, whether in Northern Ireland or anywhere else in the world. That goes back to the previous amendment, Amendment No. 8. Exceptionally, if the person is accompanying a child for medical treatment abroad, payment can continue for up to eight weeks. These rules allow pensioners to take short holidays without any disruption to their income. Of course, the intention is that there will be an equivalent pension credit scheme in Northern Ireland. People visiting the Province could, I suppose, claim under that scheme while they were there and reclaim under the Great Britain scheme on their return. However, I do not believe that to be an appropriate way of handling the situation.
The problem worsens if we compare the position of people visiting Northern Ireland temporarily to those travelling anywhere else. For example, a pensioner going to Spain or to the United States on holiday for up to four weeks would hold on to his pension credit during that temporary absence from the UK, but his neighbour visiting Northern Ireland for the same length of time would have to give it up because he or she would not be in Great Britain, though still in the
UK. Therefore, the visitor to Northern Ireland would be placed into a worse position than that of the pensioner taking up temporary residence abroad on a four-week holiday. I hope that I have adequately explained the possible effect of the noble Lord's amendments. Accordingly, I urge him not to pursue them.
Lord Higgins: In the light of that explanation, I beg leave to withdraw my amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 8 and 9 not moved.]
Baroness Turner of Camden moved Amendment No. 10:
- Page 2, line 1, leave out from "means" to end of line 4 and insert "the age of 60"
The noble Baroness said: In moving this amendment, I shall speak also to Amendment No. 54, which is also tabled in my name and that of my noble friend. There are also other amendments included in this group. I begin with Amendment No. 10. Under Clause 1(6), the qualifying age for the guarantee credit will rise from 60 to 65 between 2010 and 2020 in line with women's pension age, as was mentioned earlier. The effect of this amendment would be to keep the qualifying age at 60 on the grounds that many people have to retire at that age, often with very small occupational pensions. The MIG is now payable at 60 to both men and women, despite the fact that men's state pension age is 65.
Amendment No. 54 proposes the deletion of paragraph (c) in subsection (3) of Clause 6. Under that paragraph it is the Secretary of State's duty to fix an assessed income period—normally five years—only where the claimant or his or her partner is aged 65 or over. For those under 65 the weekly means test would continue. In the case of a woman retiring at age 60, there is no reason why the first five-year assessment period should not begin at once. In the case of a man under 65, the initial assessed income period should be shorter than five years, but this is provided for elsewhere. Therefore, it does not seem necessary to limit the effect of Clause 6 to those aged 65 or over. That is what the amendment seeks to remove. Moreover, if the five-year assessment is intended to encourage take-up, it will be much less effective if claimants have to be told that it will not apply for the first five years. I beg to move.
Lord Hodgson of Astley Abbotts: I have two amendments in this group—Amendments Nos. 24 and 26—to which I should like briefly to speak. When I spoke previously, I omitted to declare two interests. I am chairman of the trustees of an occupational pension fund and a director of a mutual building society, which gives me a peripheral involvement in the matters now under discussion.
I approach the subject from a slightly different angle from the noble Baroness, Lady Turner. It seems to me that we must make every possible effort to simplify the proceedings, the arrangements, and the nomenclature
in the Bill. As the noble Baroness pointed out, the guarantee credit is available at one age while the savings credit is available at another. Changes will take place in the pensionable age for women—though, admittedly, eight years away from where we are now. However, in primary legislation, eight years is but the blinking of an eye. I hope that we shall be able to change the reference to specific ages on the face of the Bill to the phrase, "the qualifying age". This would enable us to be more flexible in the future and not have a series of anomalies that may serve to confuse, and, indeed, lead to idiosyncrasies, inequities, and unfairness after the Bill reaches the statute book.5.15 p.m.
Baroness Barker: I shall speak to Amendments Nos. 11 and 24. This group of amendments deals with the issue of equalisation of the savings credit—that is, equalisation of payment to men and women at the age of 60. The matter was aired on Second Reading. On that occasion, the Minister spoke at length about the difficulties and the complexities involved. She also outlined the fact that we are in a transitional period up until the year 2010, and then, again, up to the year 2020, for raising the basic pensionable age. So, until we reach the year 2010, we shall have a difference between men and women in this respect; namely, the pensionable ages of 60 or 65.
As the Bill stands, the guarantee credit will be payable at the age of 60, but the pension credit will be payable from 65. This means that women pensioners between the ages of 60 and 64 will not be eligible for the savings credit. I take a slightly different approach to the issue from some noble Lords. I am sure that the Minister will respond by saying that because of the current situation—the situation that we shall continue to be in until such time as there is equalisation at age 65—there will always be anomalies and inequities and it is a question of which anomalies and inequities we are willing to accept.
The Government have framed the legislation specifically to avoid inequities between men and women. So payments will be made to both men and women at the age of 65. I believe that my amendments would achieve the same aim. They would not create an inequity between men and women. However, they would make the savings credit available to women aged 60 to 64. There are many reasons behind that proposal. We have the Government setting precedents of equalisation at the age of 60 for MIG, winter fuel payments, free prescription charges, and also for concessionary transport.
In the age group of 60 to 64, we know that there are many women who fall into the low-income bracket, and these measures are designed to meet that situation. Equally, we know that, overall, women pensioners tend to be poorer than their male counterparts. One of the arguments that I am sure the Minister will deploy is: why should men aged 60 to 65 receive this benefit when so many of them may well be in work? If that is
so, I would respond by saying that they would presumably be in income brackets that would take them above the level of the award.There is one further reason for considering the question of equalisation. I have in mind the impact on housing benefit and council tax benefit. The age differences in assessment will create a level of complexity in the calculations of those benefits. With the current proposal to start the savings credit at age 65, rather than 60, this will mean that housing benefit will be calculated in three different ways, depending on whether someone is aged: first, under 60; secondly, 60 to 64; or, thirdly, 65 and over. Bearing in mind all the other complexities of the Bill, it seems to me that this is a matter that we should seek to avoid.
It is often possible in Committee to lose sight of the overall purposes of a Bill as one gets sucked ever more into the detail. We should remind ourselves that the stated intention of the savings credit is to encourage people to save. For those reasons, I do not believe that it is right for women aged 60 to 64 to be omitted from the provision.
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