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These regulations are counterproductive. They will tend to increase child poverty and homelessness, and they are more trouble than they are worth. I hope I can persuade my noble friend to press this to a Division, if she feels so minded. I shall certainty support her if she does so.

Lord Skelmersdale: My Lords, the noble Baroness, Lady Thomas, is quite right to draw the House’s attention to this order as it has had the most devastating critique of any regulations issued by the Department for Work and Pensions in recent years. That is exemplified by the speeches that we have heard from all round your Lordships' House. Like others, I note that these regulations were referred to the Social Security Advisory Committee. These matters are often dealt with by correspondence, as the Minister well knows, but not

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this time. The Social Security Advisory Committee decided that it would undertake a full inquiry, citing its continuing interest in the backdating of income-related benefits, the apparent lack of reliable evidence regarding the rationale for making the changes in the first place, the unsupported costings for the new arrangements and the unprecedented number of complaints from organisations and individuals, not least those on behalf of vulnerable groups which will inevitably be affected. It also believed that these regulations are likely to go against the Government’s avowed aim of reducing poverty.

As the noble Baroness, Lady Thomas, said, this is hardly surprising as the department made similar proposals to those in this order as long ago as 2000, which were summarily dropped following the Social Security Advisory Committee’s similarly adverse comments. Yet here we are again, as the Government still maintain that the order will result in savings for the public purse and stop what they call “confusion” among claimants. They are surely right on the first point, and your Lordships’ Merits of Statutory Instruments Committee has provided us with some figures, which I can only say were prized out of the department by the Social Security Advisory Committee. We were told that the saving amounts to some £170 million in 2009. It is therefore incredible that the department failed to live up to the Government's own requirement that an impact assessment is required for any proposal that reduces costs by more than £5 million. Your Lordships’ committee drew the conclusion that the lack of such an impact assessment must mean that the savings are going to be nothing like the £170 million that was suggested. If she will allow me to paraphrase her, the noble Baroness, Lady Thomas, thinks that nobody knows.

Like the noble Lord, Lord Kirkwood, I am much more cynical. I believe that significant savings will be made, but that Ministers did not want to make that too obvious to the Social Security Advisory Committee or to Members of Parliament. That leads me to my first question: is the anticipated figure still £170 million? If so, why was no impact assessment produced? Secondly, why the apparent ageism? Why should claimants over 60 be treated any differently from those under 60? This question is relevant to claimants of housing benefit and, to a lesser extent, of council tax benefit, both of which were mentioned by the noble Lord, Lord Best. SSAC has often argued that housing benefit is different from other social security benefits because a significant number of claimants pursue it only after they have got badly into arrears with their rent, maybe even to the extent of being threatened with eviction. These rent arrears often pertain for many months and are suffered by people who, almost by definition, fall into the poorest category in our society. My complaint is that from now on, pensioners will have only three months to claim, whereas those of working age will have six. Why the discrimination against pensioners?

Talking of pensions, does the Minister really consider that this discrepancy is balanced by an undoubted bonus; namely, the increase in the time that pension credit can continue if the claimant is abroad from four to 13 weeks? The Government and SSAC believe that

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the current period is too short. I am happy to go along with that, but why was 13 weeks chosen? It seems a thundering long time for people to be on holiday, especially as people on pensions credit are most unlikely to have much or, indeed, any other income. Being charitable, I suppose that some may have children who are happy to have them for this length of time, but I rather wonder how many of your Lordships would dump yourselves on your expatriate family for so long. I certainly would not. It is also possible that a pensioner may go abroad for medical treatment, but even with recuperation time, 13 weeks seems an excessive amount of time. I ask again, what is the magic about these 13 weeks?

As a philosophy, it stands out against the proposal for housing benefit and council tax benefit, but to me the worst horror of this order is the reduction in the time that pensioners are allowed to claim pension credit, upon which the noble Lord, Lord Low of Dalston, majored. At the time of the worst financial crisis in living memory and with pensioner inflation running at 9 per cent, this decision means that the poorest pensioners—those who have not yet claimed pension credit—are to remain in poverty if they do not claim within three months, and pensioner poverty is increasing. The most recent figure I have is that in 2006-07, 2.1 million pensioners were living in poverty, which is an increase of 300,000 people. That was at a time when the Government were supposedly seeking to reduce pensioner poverty. The Department for Work and Pensions’ agreement targets for 2005-08 said as much. It stated that by 2008, it would,

We know that 1.7 million pensioners are not claiming pension credit, more than half of whom are living in poverty. How close are the Government to the 2008 target? More importantly, what research have the Government done on the effect of the regulations? An up-to-date survey published in September entitled Flagship or Flagging? The Impact of Pension Credit Five Years On found that one in eight of older people had not heard of pension credit; that one in six over 80 was unaware of it; and that one in six of those nearing retirement is unaware of it. The department's impact assessment seems to agree with that. It states:

“Older pensioners are more likely to be affected by the proposed rule change. In 2006/07 older pensioners were more likely to backdate their claims than younger pensioners and were also more likely to do so for the maximum 12 months”.

As I understand the figures—I am sure that the Minister will take great delight in correcting me if I am wrong—about £2.8 million is available in pension credit for the 1.8 million people who are not claiming it. If they took it up, that would lift half a million people out of poverty at a stroke, giving those currently missing out an average of £1,477 a year.

Who is to gain from that mishmash of government policy? Certainly not current pensioners, as the noble Baroness, Lady Greengross, noted most forcefully; nor those who should be getting housing benefit, council tax benefit or both, or perhaps all three of the benefits that we are discussing.

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The Minister must be heartily relieved that my party still stands by the convention that prevents me praying against the statutory instrument. It is so damaging to the poorer members of our society that I am surprised that noble Lords on the Liberal Democrat Benches have not done so. The noble Baroness, Lady Thomas, regarded this as a forceful Motion. I beg to disagree. Perhaps she will explain when she winds up. It seems to me such a vote-loser that the Government should have second or, as the proposal has already been abandoned once, third thoughts as to whether the tiny gains outweigh the undoubted damage that the regulations will do to the poorest members of our society.

Is the game worth the candle? Now is hardly the time to reduce the time limits for claiming and backdating pension credit, for example, unless of course the Government have given up on the pensioner vote.

The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord McKenzie of Luton): My Lords, this has been an important debate and I acknowledge the strength of the views expressed around the Chamber. Before I get into some of the detail of the Motion, I refer to the assertion of the noble Lord, Lord Skelmersdale, about pensioner poverty and the Government's position on it. Frankly, we are not in the mood to take any lectures from his party on that. Our strategy since 1997 has been to target help on the poorest pensioners while providing a solid foundation of support for all. We have a good track record of reducing pensioner poverty. Since 1998, we have lifted 900,000 pensioners out of relative low income. Pensioners are now less likely to be living in poverty, as measured by relative low incomes after housing costs are accounted for, than the population as a whole.

If we had continued with the system that we inherited from the noble Lord’s party, we estimate that there could have been about 1.5 million more pensioners in poverty today, and we will be spending about £12 billion more on pensioners in 2008-09 than if the 1997 system had been continued.

Lord Skelmersdale: My Lords, if the Minister is about to leave that point, I remind him that I asked him how close to the 2008 target we now are. After all, as the Government are now claiming credit, as he just has, they must come clean about whether the target has been reached or not.

Lord McKenzie of Luton: My Lords, I have given the current figures to the noble Lord. As always, they are updated in the Pre-Budget Report and Budget Statements and doubtless he will have a chance to raise those issues again at that time.

In disagreeing with the change proposed in the regulations, the noble Baroness, Lady Thomas, made comments on the evidence to support the policy and the fact that regulations were laid during the Recess. Let me first address the issues raised on timing and consultation, and then deal with the change itself. I stress that the Government have been open and clear about the changes and given plenty of notice. The changes were announced by the then Minister for Pension Reform on 5 December last year as part of

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the annual uprating Statement. He made it very clear that the reduction in the backdating period for pension credit, housing benefit and council tax benefit from 12 months to three months would be introduced from October 2008. An equality impact assessment was also carried out and published by the Department for Work and Pensions in April. This provided evidence on both the rationale for and the impact of the changes in backdating. As noble Lords will be aware, the Social Security Advisory Committee decided to consult on the regulations, and it reported back to the Secretary of State on 14 July. The Government’s response to its report was laid alongside the regulations on 15 September to enable the regulations to come into force on 6 October, as originally announced. The timing therefore reflected the need to take account of and respond to consultation, but there was plenty of time for discussion and debate following the announcement in December last year.

I reject the assertion that the regulations were sneaked in under the radar. As the noble Lord, Lord Low, and other noble Lords have said, consultation is an important part of any change, and one that we think about carefully. We held informal discussions with Age Concern and Help the Aged. Although they had reservations about the backdating changes, they both acknowledge the benefits that the wider package will bring. We also consulted local authority associations on the changes to housing benefit and council tax benefit backdating, and listened to their concerns and those of other stakeholders, which were expressed as part of the consultation exercise conducted by the Social Security Advisory Committee.

These discussions focused on concerns about working-age customers and the potential adverse impact on certain vulnerable groups. Although we believe that the maximum backdating period for working-age customers should also be three months, we have decided to introduce this change in stages, starting with a period of six months. The rationale for this revision was made clear in the Government’s response, laid alongside the regulations, which also announced that we will review these revised arrangements for working-age customers at the end of 2009—a point pressed on us by the noble Earl, Lord Listowel, and the noble Lord, Lord Kirkwood.

The Government did not make changes to the backdating rules lightly; they were agreed as part of a wider package of measures aimed at improving the benefit process and reducing intrusion for pensioners. As such, we cannot consider them in isolation. The changes to backdating rules will reduce the need for customers to provide evidence and documentation for historical circumstances, including any changes over that period. They will also reduce the burden on operational staff when establishing the likely entitlement to benefit for a past period, and will help to simplify the decision-making process. The evidence makes it clear that the changes will not affect existing customers. Indeed, no customer need lose out if they claim as soon as they think they may be entitled to. We do not want people delaying making a claim and missing out on benefits to which they are entitled. The overall package of measures will make the claims process for pensioners easier.

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The Government are also keen to foster a greater sense of responsibility among customers for their financial affairs. An unintended consequence of lengthy backdating periods is that they can increase the likelihood that people, particularly in the most vulnerable groups, become desensitised to their situation and avoid taking action to tackle their debts. It is therefore important that they do not delay making their claims for housing benefit and council tax benefit, regardless of the length of any backdating period, particularly when rent arrears have started to build up.

Lord Oakeshott of Seagrove Bay: My Lords, the Minister said that these changes were being introduced to reduce intrusion into pensioners’ affairs. As claiming pension credit is entirely voluntary—the pensioner claims it only if they want to be intruded into—how on earth can what he says be right?

Lord McKenzie of Luton: My Lords, as a practical matter, when someone makes a claim and follows it the whole way through, they do not necessarily know in advance what the process will entail. The feedback that we have from people working in the service is that, once you get into the process, it is troublesome for people to have to dig out bank statements from 12 months ago or to be asked to justify their circumstances over that period. It is a fraught process. I remember from my days as a local councillor—the noble Lord may do, as well—that filling in forms and helping people with the assessments at surgeries is challenging. That point is real.

The noble Lord, Lord Skelmersdale, asserted that these changes were about saving money. I reject that, as indeed did the noble Lord, Lord Kirkwood. They are about targeting resources most effectively. Over the long term, the package results in extra expenditure for pensioners, rising to £250 million per year by 2050 in 2007-08 price terms.

We have made the claims for housing benefit and council tax benefit for pensioners more automatic. Customers will be able to claim these alongside pension credit by phone, without the need to complete or sign a claim form. We estimate that about 50,000 pensioners will benefit in the next couple of years. We are also reducing intrusion for people aged 75 or over on pension credit by removing the need for them to report most changes to their retirement income. We estimate that more than 1 million pensioners will benefit through not having to complete a review of their income and capital. We are also increasing to 13 weeks the temporary periods that people can spend abroad without losing their pension credit. I will return to that point and to the question asked by the noble Lord, Lord Skelmersdale, in a moment.

These changes were widely publicised, and we have taken steps to ensure that pensioners who thought that they may have been entitled for more than three months but had not claimed did so before 6 October.

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We are making every effort to ensure that people are aware of and claim their entitlement as soon as they think that they may be entitled. Each week, our local service makes around 13,000 visits and we continue

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to write to people who we think may be eligible for pension credit, urging them to claim. The Pension, Disability and Carers Service has joint working partnerships through the implementation stage with all 203 primary-tier local authorities in England, Scotland and Wales. It provides a single point of access to social care and benefits entitlement.

We will also work with key welfare rights organisations to ensure that working-age customers are encouraged to claim in good time and with the Department for Communities and Local Government to get the message across to landlords and tenants. On tenants, if landlords tackle rent arrears at an early stage, that will help to ensure that people who are entitled to help with their housing costs are identified and given the support to make a claim.

A number of noble Lords referred to 2000, when previous seemingly similar proposals were withdrawn. A number of important changes have taken place since 2000: namely, a rapid reclaim process for customers undertaking short periods of employment; a shortened housing benefit and council tax benefit claim form for pensioners, which omits sections that are less likely to be used for this customer group; a three-page claim form for pensioners who receive pension credit; and a combined claims process for working-age customers where the housing benefit and council tax benefit claim details are taken alongside claims for income support, jobseeker’s allowance and incapacity benefits. There are many more changes which I do not have time to go through in detail.

A number of noble Lords, including the noble Earl, Lord Listowel, the noble Lords, Lord Low and Lord Best, and the noble Baroness, Lady Thomas, focused on those vulnerable individuals who lead chaotic lives. The SSAC report highlighted the issues facing working-age customers, particularly those vulnerable groups. The concern is that this group may be more likely to get into arrears with housing costs, leading to possible evictions. We believe that six months will allow those customers, including those who are taken to court for rent arrears, sufficient time to apply for housing and council tax benefits backdated to cover the arrears of housing costs.

The noble Lord, Lord Best, in particular focused on the possibility of evictions resulting from these changes. We believe that these changes should encourage customers to take more responsibility for their housing costs at an earlier stage and so encourage landlords and local authorities to fulfil their responsibilities to collect rent and council tax, and to take prompt action when arrears accrue.

The noble Baroness, Lady Thomas, talked about times of bereavement. We accept that at such times contacting the DWP will not be a priority. We are taking steps to make claiming after bereavement easier. We review state pension automatically after a partner’s death and a bereavement payment is made without the need for a claim form. A number of points were made about the evidence base for this policy and the data that we use. We looked at information from a wide range of sources, including departmental analysis, local authorities and a number of external stakeholders such as national and local welfare rights agencies, and housing associations.

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Specifically, the noble Lord, Lord Kirkwood, and the noble Earl, Lord Listowel, asked about monitoring the impact of these changes on working-age claimants. We will collect information from case studies, Citizens Advice and others. We have improved data collection from local authorities and will continue to work with them. We have asked local authorities to keep us in touch and up to date with the impact of these changes.

The noble Lord, Lord Kirkwood, asked whether the Benefit Simplification Unit approved these changes. All changes to policy and regulations are seen and approved by the unit, which has acknowledged that 12 months’ backdating can cause difficulty for staff and customers. This change represents a simplification, bringing backdating rules broadly in line with other income-related benefits.

I have dealt with the issue on saving money and I will deal briefly with one point—

Lord Skelmersdale: Not quite, my Lords. I am happy to accept the Minister’s assertion that overall there will be no saving, but none the less the department eventually provided the Social Security Advisory Committee with the figure of £170 million in saving. Is that a saving in administration or for some other reason?

Lord McKenzie of Luton: My Lords, the savings figure is still £170 million and the department is only required to do an impact assessment on changes that produce administrative savings of more than £5 million. The figure of £170 million represents a combined benefit and administrative costs saving. Obviously other benefit costs arise from this because of the extra support given to pensioners when they make their claims.

I shall conclude with a response to a point put by the noble Lord, Lord Skelmersdale, about extending the period of temporary absence abroad to 13 weeks. The intention of this change, which had been campaigned for by Age Concern, is to allow the majority of those pension credit customers who go abroad temporarily to retain their entitlement and thus not have to go through the process of making a new claim when they return. We have no evidence to suggest that extending this period may lead to more abuse of public funds and we think the balance is about right.

In conclusion, I urge noble Lords to look at this as a package of benefits and changes to backdating. In all these matters, we have to make a judgment on where the line should be drawn, and I believe that in the circumstances we have drawn it in the most appropriate place. I ask the noble Baroness not to press her Motion.

Baroness Thomas of Winchester: My Lords, I thank all noble Lords who have spoken in the debate, particularly the four Cross-Benchers who supported my Motion. I thank also my noble friend Lord Kirkwood and the noble Lord, Lord Skelmersdale. I note that we had no speeches from the Government side.

Noble Lords will be pleased to know that I am not going to make a second speech, but I want to take up one matter with the Minister on his point about

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encouraging claimants to take responsibility at an earlier stage. Case studies show that the reason for the need for backdating is the incapacity to claim rather than irresponsibility. People do not deliberately delay making a claim or renewing their entitlement. Research undertaken by the DWP itself identifies that people are unable to claim because of what is quite often a health-related inability. They are the ones most likely to be disadvantaged by the changes.

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