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Baroness Hollis of Heigham: My Lords, I am always delighted to work out what the noble Lord has said. When I am in doubt, I shall ask him.
First, I shall pick up a point not related to the question put by the noble Lord, Lord Higgins, but a point raised by the noble Lord, Lord Freeman, with regard to performance targets. To ensure that there is no ambiguity about this point, performance against published targets will be reported in the board's annual report. A quarterly report will be made containing information on the award of tax credits. As now, it will contain detailed information about regional variations and the like.
I turn now to the question raised by the noble Lord, Lord Higgins. He asked which passported benefits will be administered by the Inland Revenue and which by the Department for Work and Pensions. There may be one or two passported benefits, such as entitlement to the social fund and so forth, that will continue to be administered by the department to those claimants of child tax credit whose adult element is income support and jobseeker's allowance.
But passported elements as we normally think of them, such as free school dinners, prescription charges and the like, will be administered neither by the Inland Revenue nor by the Department for Work and Pensions. Rather, they will come under what might be called the host government department. Thus free school meals are provided by the Department for Education and Skills; free prescriptions and dental treatment are provided by the Department of Health. They are to be passported because, as the noble Lord rightly identified, if a claimant has been on income support or jobseeker's allowance, those provide an automatic ticket to eligibility for such benefits.
The list includes other benefits—I have been trying to recall some of the more obscure among them—such as reduced charges for utility payments; help with school uniform purchases, which is an education matter; prison visits; and home insulation, a benefit dealt with by the former DLTR. Furthermore, I cite entitlement of access to, although not necessarily an award from, the social fund, which will be a matter for the Department for Work and Pensions. The devolved administrations will also have their own schemes for passported benefits.
All those benefits will be paid to people by virtue of the income test employed by the relevant department. So far as I am aware, they have no connection, in terms of passported benefits, to national insurance or the contributory principle. Obviously I do not refer to benefits such as winter fuel payments or TV licences, which are passported because the recipient would be in receipt of an old age pension. In this context they have no connection to these tax credits. At that stage the noble Lord's point would be brought to bear if those were the elements that he wanted to call "passported" benefits.
I hope that that makes the matter clear to the noble Lord. Passported benefits, as they are conventionally understood, whereby via the income test the recipient will be entitled to those benefits, will be handled by the
home department—the Department for Education and Skills or the Department of Health. I give way to the noble Earl.
Earl Russell: My Lords, I am most grateful to the Minister. Can she give an assurance that nothing in this Bill would restrict the freedom of the devolved administrations to take their own decisions on these matters?
Baroness Hollis of Heigham: My Lords, I have no reason to think so, but the noble Earl will understand that tax credits and social security remain national considerations. However, my understanding is that the passported benefits and their eligibility are matters for the devolved administrations. If I need to qualify that remark, I shall write to the noble Earl.
If the noble Lord, Lord Higgins, is content with my explanation of the nature of passported benefits, perhaps I may return to the issues raised by the noble Lord, Lord Freeman. I am sure that no noble Lord in this House would challenge the notion that people must know about and understand their entitlement to benefits which they are, indeed, entitled to receive. Knowledge is power in this context. If people do not know about the benefits, they will not be able to claim them.
Lord Higgins: My Lords, I am grateful to the noble Baroness for giving way. I wish to clarify one point. Does the fact that someone is entitled to a tax credit give them any kind of "passported benefit" to which otherwise they would not be entitled?
Baroness Hollis of Heigham: My Lords, yes. It would depend on their income; in other words, the question would arise over the connection between the income scale of the home department—the Department for Education and Skills may decide that free school meals will be cut off at a certain point of income level while the eligibility for free prescription charges may be cut off at a different income level by the Department of Health—and the read-across from those levels to the tax credit system. That is how the levels for eligibility will connect.
What we cannot do any longer is put in place an easy calibration. Those on income support will certainly be eligible for passported benefits, but there will be people who are eligible, perhaps, for child tax credit which will be sufficiently generous in its maintenance payments to float those recipients off income support. Therefore there will be complexities with regard to the read-across.
Basically, however, the Department for Education and Skills and the Department of Health have an income test which so far has been triggered by the read-across from income support and jobseeker's allowance. The income test will continue to apply, but clearly tax credits, which will include the working families' tax credit, apply right up the income scale to an annual income of £50,000 and therefore there can
be no automatic read-across from tax credits. As the noble Lord will recognise, unless that is the case then far too many families would become eligible.
Lord Higgins: My Lords, is the noble Baroness saying that the fact that someone is entitled to a tax credit in itself does not entitle them to any other passported benefits which otherwise they would not receive because of the level of their income?
Baroness Hollis of Heigham: My Lords, that is correct. Tax credits will apply to incomes possibly up to £50,000 per year. Indeed, the matter is very straightforward. People will be entitled to passported benefits according to their level of income. What has yet finally to be determined—I hope that I shall be able to give clear details of this when we come to Third Reading—is the read-across from income levels to how high up a claimant is on the tax credit system. I refer here to the chimneys of income levels. We have to ensure that the read-across works effectively. I hope that that makes sense to noble Lords.
I am able to confirm the information I gave a little earlier in my remarks to the noble Earl, Lord Russell, about the devolved administrations. The devolved assemblies will be free to do as they wish in terms of how they apply the system. I am glad to be able to confirm that point.
I return now to the substantive issues raised by the noble Lord, Lord Freeman, in his amendment. Of course he is absolutely right to say that the information has to be made available. It also has to be timely and up to date. Ideally, because of the circumstances that I have just described, the information would best come from the home department, such as education or health. I believe that that is why the noble Lord wanted to see signposting put in place. That is quite right and is much better than an assessment of entitlement made by the Inland Revenue, which would not necessarily have the relevant information, given the host of very minor passported benefits that are available.
I hope that I am able to give the noble Lord the reassurance that he seeks by saying this. The award notice that the Revenue will send out to claimants detailing what tax credits they will be paid will include a message telling them that they may be entitled to other benefits as a result of their award. The message will advise them to telephone the Revenue's tax credit helpline, which is the point at which most applicants will be able to receive guidance. In turn, the helpline will direct applicants to sources of information about the main benefits.
As the noble Lord, Lord Freeman, identified, there will be interviews available for claimants. Furthermore, the Revenue is planning to produce a leaflet, telling claimants how to access more information on particular major passported benefits. I can confirm that the leaflet will include all the relevant telephone numbers, fax numbers and other information that we believe will be helpful. In that way, we shall ensure that people know how to follow up any benefit to which they think they may be entitled.
I hope that, as a result of my remarks, the noble Lord, Lord Freeman, will accept that we are putting in place signposts, as he suggested. We are doing that through the helpline, the offer of interviews, and the publication of literature containing all the relevant information. With that explanation, set in the wider context of what is a passported benefit and who is to be responsible for it, I hope that the noble Lord will feel able to withdraw his amendment.
Lord Freeman: My Lords, I thank the Minister for that helpful response. The record will need to be studied.
I shall work on the assumption that the relevant interests in the community—those who work with and represent people who will be making claims for tax credits—will be able to comment on and have some input into the literature and the nature of operation of the helpline. Over the coming years they should be able to review the effectiveness of those measures. On that basis, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
6 p.m.
Clause 7 [Income Test]:
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