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Baroness Noakes: I thank the Minister for her extremely helpful response. Can she estimate roughly how many assessed income periods are likely to be under five years; namely, how often these powers of variation are likely to be used?
Baroness Hollis of Heigham: We expect something in the order of two-thirds of all pension assessments to
run for the full five years. Within the one-third that will not will be included those which may experience a delay of a year or so. For example, if someone is 65 years old, but their partner is only 57 and has several years left to work, it may be several years before a stable income is established. There is also the possibility that some pensioners' incomes themselves may change, rising or falling, and that they would wish to report those changes.We are expecting, more or less from day one, that two-thirds of all pensioners will be entitled to the five-year assessment period. The reasons why the remainder will not be entitled stem from a variety of causes.
Lord Hodgson of Astley Abbotts: I am grateful to the Minister for her full comments. I do not think that I heard her respond concerning the Questions for Written Answer tabled by the noble Baroness, Lady Greengross.
Baroness Hollis of Heigham: I do apologise. The Answers to those Questions were tabled yesterday.
Lord Hodgson of Astley Abbotts: I thank the noble Baroness. This was of course a probing amendment. As I said earlier, it covers some of the ground that we have discussed on previous occasions. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Barker moved Amendment No. 62:
- Page 6, line 28, at end insert—
The noble Baroness said: On the first day in Committee we touched on the matter of housing benefit in relation to Amendment No. 22 moved by the noble Lord, Lord Higgins. This amendment is slightly different. It deals with the vexed question—I think it is right to call it that—of housing benefit and council tax administration.
In 1998, 2.6 million people aged 60 or over were in receipt of council tax benefit, while 1.8 million received housing benefit. Currently housing benefit and council tax benefit awards last for up to 60 weeks, although at present there is no such requirement for renewing MIG claims. For both of those benefits, any change in circumstances, such as even a small increase in income, must be reported and the benefit then reassessed. The noble Baroness has just told the Committee that the period for assessment with regard to pension credit will be five years.
The purpose of the amendment is to seek to establish whether there will be a similar assessment period of five years with regard to housing benefit and council tax benefit. In our debate on hospital downrating, Members of the Committee referred to the severe problems faced by many pensioners, in particular those on very modest incomes, when their housing benefit and council tax benefit is withdrawn. The
In view of all that has been said, it is a fact that pensioner circumstances do not change that much. An alignment of the two would make sense and I hope that the department would be able to accept such a proposal.
On Thursday last the noble Baroness stated at col. 1632 that:
We on these Benches feel that aligning the two elements would not, in most cases, make a great material difference. If a substantial change took place with regard to a person's eligibility for housing benefit, it would most likely be caused by one of those other factors already outlined by the noble Baroness, such as the death of a partner or a move into long-term care. That is the reason behind our wish to move the amendment. I beg to move.
Lord Higgins: I think that we should keep a score sheet to record which Member of the Committee can rise to their feet with greater speed. At present I believe that the score is two to one in favour of the noble Baroness.
In proposing this interesting amendment, the noble Baroness, Lady Barker, has suggested that housing benefit provisions might come back to haunt the Minister. Indeed, I think that they have been haunting her for some while. In March 1999, Harriet Harman said that proposals for reform would be brought forward shortly. In June 1999, the Secretary of State said,
On an earlier amendment, the Minister passionately advocated the new five-year proposal—of which, as she knows, we are in favour as a broad principle. We shall have qualifications but, generally speaking, we
But, having said that, there is a considerable argument for saying that arrangements should be integrated between housing benefit and the state pension credit. As the noble Baroness who moved the amendment said, if we introduce a five-year system for state pension credit, the situation will not be the same with regard to housing benefit. If the Minister wants a system whereby pensioners know where they stand over a five-year period, there is a case for integrating the two parts of the social security system. Housing benefit and council tax benefit are among the relatively stable elements of the component parts which together make up the total benefit that any individual may receive.
However, we all know that there are real problems. Even now there are different claim forms for housing benefit among different authorities—we have been arguing for a long time that they should be uniform—and the information exchanged between the Government and local authorities is more in one direction than the other. We will need to establish to what extent the local authorities will be providing the Government with information relevant to the pensions credit, and to what extent the information the Government have on that is in turn related to housing benefit. There is a strong case for applying the five-year principle to all forms of benefit. We shall listen with interest to what the Minister has to say about that.
My understanding is that the period for housing benefit is 60 weeks as opposed to five years—there is quite a big difference—and some degree of uniformity is necessary if we are to achieve the Minister's declared objective of ensuring that people in receipt of these benefits know where they stand over a five-year period.
Baroness Hollis of Heigham: I am not sure whether the noble Lord is seeking to tempt me into a general debate on housing benefit and its administration. If so, that is for another time and place, but not on this Bill. He knows that we are seeking to reform administration; he knows that a major reform of housing benefit policy has to follow, or be associated with, the reform and restructuring of social housing rent—and that is a 10-year job or longer. That point has been made on previous occasions.
Lord Higgins: Is the Minister saying that, despite the statements in the manifesto, nothing will happen for 10 years?
Baroness Hollis of Heigham: I did not say that. I said that a major overhaul of housing benefit policy would have to follow. For example, it has been proposed to us that there should be a flat rate housing benefit incorporated into IS or JSA. Those kinds of moves, if appropriate, would have to follow a major restructuring of rents. As I have expressed
As the noble Baroness explained, Amendment No. 62 seeks to introduce powers which would enable the Secretary of State to make regulations allowing the assessed income period set in pension credit to be applied to housing benefit and CTB. As the noble Lord, Lord Higgins, reminded the Committee, those payments are currently restricted to a maximum of 60 weeks. At the end of that period, local authorities require a new claim. This arrangement is intended to ensure that changes in circumstances do not go unreported. The effect of the amendment would be to allow, in pension credit cases, for the 60-week period to be replaced by the pension credit assessed income period.
I am glad that this amendment gives me the opportunity to describe in more detail the arrangements we intend to put in place for pensioners receiving pension credit and housing and council tax benefits, which affects some 8 per cent of pensioners. Our aim is to streamline the delivery of benefits to pensioners. The noble Baroness, Lady Barker, is right. There is no point in reducing the requirement for pensioners to report changes in pension credit, on the one hand, but continuing with the current system of annual claims in housing and council tax benefits on the other. There is an opportunity here to make the administration of housing and council tax benefits easier for local authorities, something which I am sure they would welcome.
We have concluded that where there is an award of pension credit there is no need for local authorities to continue to make regular inquiries about income. Where the guarantee credit is in payment, local authorities will award full housing or council tax benefit automatically. Until the Pension Service tells them otherwise, they will continue to pay benefit. In savings credit only cases, local authorities will need to carry out a full assessment, but we are making an amendment to the Social Security Contributions and Benefits Act via paragraph 3 of Schedule 2 to the Bill which will allow local authorities to use the Pension Service's assessment of the claimant's income for the duration of the assessed income period. This figure will be up-dated throughout the assessed income period to take account of the annual increase in benefits and increases in second pensions.
I am pleased to tell the Committee that the effect of all this is that we will be doing exactly what the amendment seeks to do. Local authorities will still need to continue to review cases regularly—most tenants have a yearly rent increase and private sector tenancies are subject to the rent officer arrangements—but their inquiries will be limited to matters which concern rent, not the claimant's income. In other words, the claimant's income after the assessed period will be taken over into the housing benefit assessment.
We are discussing the shape of these new arrangements with local authority associations before finalising the detail. It is right that we should do so in order to give local authorities the opportunity to work with us on the development of those procedures.
I hope that the noble Baroness is not only satisfied but thrilled, delighted and overwhelmed. I hope she feels that we have gone well beyond her expectations in seeking to ensure that the rules in pension credit and housing and council tax benefit schemes work together. We are adopting a slightly different approach from the one in Amendment No. 62 because we consider that our approach will minimise the burden on local authorities. However, I have every confidence in saying that we believe the outcome will be the same. So, on the basis that the noble Baroness is getting the substance of precisely what she asks, I hope that she will feel able to withdraw her amendment.
"( ) Where a claimant is in receipt of housing benefit or council tax benefit (or both), regulations may provide for the pension credit assessed income period to apply also to such benefits."
"Local authorities will have to identify the new applicable amounts for pensioners. However, given the current state of computerisation, we are not worried about that".—[Official Report, 24/1/02; col. 1632.]
I wonder whether the noble Baroness may come to regret making that statement, or whether it may return to haunt her. It is possible to deduce from it that there must be some areas of the country which the noble Baroness has not gone round to visit lately. In particular, as I pointed out on the earlier occasion, the administration of housing benefit in some London boroughs is an absolute scandal.
"the present housing benefit can't continue".
On 28th June 1999, a Treasury source said that housing benefit reform would be,
"the biggest project facing the Treasury this year".
And, of course, the Labour Party manifesto had a large paragraph on this particular issue. So, in the context of trying to integrate the two systems, perhaps the Minister can give some indication of where we are in regard to housing benefit because there is fairly general agreement that a number of its aspects are not particularly good.
4.45 p.m.
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