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Baroness Barker: I wish to speak to Amendment No. 49, which is grouped with Amendment No. 48. It concerns a slightly different subject and it is, in the nature of these things, a probing amendment. It deals with the question of separation. The purpose behind the amendment is to seek information from the Minister about the circumstances in which a couple separate and are determined to have separated. We know from our deliberations the other day that a couple comprises a household unit of a man and woman living together as a couple.
The amendment's wording is taken from the WFTC Bill. I seek to establish what will happen to the less-well-off member in a couple. I accept the relevant point made by the noble Baroness, Lady Noakes, that the man may be the lower earner. I seek to establish that in the complex workings of this Bill no pensioner will be left for a significant amount of time with less income than they would need simply through ceasing to live with the person with whom they were living when the calculation was made.
Baroness Hollis of Heigham: Amendments Nos. 48 and 49 concern issues affecting couples. We have touched on some of those issues previously in Committee.
Amendment No. 48 considers how disagreements will be settled in cases where neither member can agree who should make the claim. Amendment No. 49 considers the meaning of "married" and "unmarried" couples in terms of pension credit. The argument of the noble Baroness, Lady Barker, was slightly different from the wording of Amendment No. 49, but I shall try to deal with her point. With the Committee's permission I shall deal with each amendment in turn.
Amendment No. 48 seems to do two things. First, it provides an alternative form of drafting to the current provisions in Clause 4(1) of the Bill, which ensures that only one member of a couple shall be entitled to pension credit. Secondly, the substantive part of the amendment seeks to specify in primary legislation the criteria to be followed in situations in which neither member of a couple can agree on who should make the claim. I believe that the approach we have adopted in the Bill is correct.
I start by pointing out that such cases are extremely rare. I have checked with officials who have worked in this area for more than 20 years and none has ever come across such a case. We are dealing with hypotheticals. That is not to say that there have not been cases, but on a quick check those officials had not come across any. In relation to the minimum income guarantee, such disputes, where they exist—hypothetically or otherwise—are settled by the Secretary of State, who is in effect the local decision maker, taking into account the individual circumstances of the case. Standing instructions say that in the first instance the responsibility for settling the dispute would be returned to the couple. As one would expect, the couple would be given every opportunity to resolve the problem themselves. For example, there may have been a mistake in filling in the forms.
Where a customer indicates on the claim form that their partner does not agree to their making the claim, a letter is sent to both members asking them to decide who should make the claim. Only where it is clear that they are unable to resolve the dispute or no reply to the letter has been received after 14 days would further steps be taken.
When deciding such a case, consideration would be given to a range of factors—for example, to who is normally responsible for paying the household bills. I do not believe that the noble Baroness's amendment would leave sufficient flexibility to allow the decision-maker to take account of the full range of sensitive issues that might arise in an individual case. That might involve asking detailed questions about the claimant's and the partner's incomes. For example, where income was derived from a joint bank account, it would mean making possibly arbitrary decisions on the apportionment of that income between the two partners.
We know from earlier discussions in your Lordships' House on the minimum income guarantee that customers may be reluctant to claim benefits that require excessive investigations into their financial circumstances. We seek to move away from such an approach. Given that we are dealing, so far as I can tell, with a hypothetical case, we shall lay down guidance but we hope that it will not need to be used. That will give sufficient flexibility to deal with
the matter in a decent and sensitive way. I hope that the noble Baroness, Lady Noakes, will withdraw her amendment.Amendment No. 49 is, as I would expect, a thoughtful amendment. We thought that we understood why the noble Baroness, Lady Barker, had tabled it but now I do not think that we did. It is still probably a thoughtful amendment but it involves a different thought for the day from that which we had anticipated.
For the purposes of the clause, the amendment would align the way a "married" or "unmarried" couple is defined in pension credit and make that more in line with the meaning for tax credits. If the noble Baroness wishes, I could explain why we chose one system rather than another. Basically, she was interested—perfectly rightly—in what counts as separation. For these purposes, a married couple are married to each other and are neither separated under a court order nor separated in circumstances in which the separation is likely to be permanent. In such cases, they would be treated as two single people. For the purposes of housing benefit, they would have different accommodation.
We have a choice in this regard about aligning the different definitions of a couple to either the social security system or the system for tax credits. We have gone for the social security system because, as Members of the Committee will appreciate, 1.7 million people will be transferring from the minimum income guarantee to pension credit, whereas only about 60,000 or 70,000 are simultaneously eligible for tax credits and pension credit. It makes better sense for us to follow the old DSS vocabularies, which are well established in law, and not to try to change all the legislation that feeds into that and then go for the tax system.
I have pressed my officials on this matter. I said, "Tell me in practical terms what the difference between the two definitions is. Can you put a piece of paper between them?" They said, "No, you cannot". The implications of preceding legislation suggest that it would be simpler to keep to the somewhat different definitions. In the light of that, I hope that the noble Baroness will feel able to withdraw the amendment.
3.15 p.m.
Baroness Noakes: I thank the Minister for that detailed explanation of the way in which these issues are handled in practice. My solution was perhaps much simpler and would save her officials having to ask all of those questions and make detailed decisions if there was a statutory rule. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Higgins moved Amendment No. 50:
- Page 3, line 44, leave out "not"
The noble Lord said: In moving this amendment, I shall speak also to Amendments Nos. 51 and 52.
The purpose is fairly clear but I am not absolutely certain about how the Bill's provisions will operate. Effectively, the provisions are concerned with various exclusions from benefit. Clause 4(3) is apparently
concerned with the situation in which the amount of money that can be payable to a claimant would be very small. It refers to the amount being,
- "less than a prescribed amount",
It is not clear where the power to prescribe amounts and circumstances arises in the Bill. Initially, I thought it arose in Clause 3(8), which states:
- "Regulations may prescribe descriptions of persons in whose case the maximum savings credit shall be taken to be nil".
Since we are at the beginning of our proceedings today, I return to the question of regulations generally. The Minister generously said at Second Reading that she hoped that draft regulations would be provided by the time the Bill reached its Committee stage. We understand why that was not possible but perhaps she will let us know whether they are likely to be available in time for the Bill's Report stage. So much is done through regulations in the Bill that, without seeing those regulations, it is extremely difficult to make any sensible comment on large chunks of the legislation.
So much for the procedural side of things. I turn to the substance of the amendment. As I said, it appears that the purpose of subsection (3) is to ensure that the claimant gets nothing in prescribed circumstances if the amount is below a certain figure. We understand that for convenience it may be inappropriate to pay out a small amount from week to week or month to month, but that appeared to us to be unfair, even in those circumstances. I gather that in that regard I have the support of the noble Baroness, Lady Turner of Camden. Our proposal is that the payment should be made at the beginning or end of the year, whatever the amount might be. The payment should be made as an annual lump sum.
That is not a complicated concept. It is about the simplest amendment that we have debated in our entire proceedings so far and it is probably the simplest amendment that we shall consider. I hope that we shall receive a sympathetic reply from the Minister, who has conceded absolutely nothing so far. Here is a real opportunity to say, "Yes, we shall pay the amount annually". I beg to move.
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