Clause 5 - Income and capital of claimant, spouse, etc
State Pension Credit Bill [Lords]
10:30 am
Mr Ian McCartney (Minister for pensions, Department for Work and Pensions; Makerfield, Labour)
I apologise to the Committee because the Under-Secretary, my hon. Friend the Member for Liverpool, Garston (Maria Eagle), is participating in a Westminster Hall debate this morning. I think that the hon. Member for Daventry (Mr. Boswell) will also be there later, so this Committee will be without intellectual input this morning. We shall have to muddle on until my hon. Friend and the hon. Gentleman return later. I do not know whether the hon. Member for Northavon (Mr. Webb) is also going to that debate.
Clause 5 replicates the provision in section 136 of the Social Security Contributions and Benefits Act 1992. It is desirable for consistency reasons for the provision to be carried through to clause 5, but I would not expect hon. Members simply to accept that in Committee, sit down and say, ''There you are—it's for consistency''. The amendment, if it were accepted, would remove a flexibility to make beneficial changes without the time-consuming process of amending primary legislation. I do not think that that is reasonable.
I shall say a few words about the debate that occurred in another place on the treatment of couples, to put the amendment in context, as the hon. Member for Hertsmere (Mr. Clappison) requested. Much interest was shown in the other place in the composition of family units and how the pension credit should treat single people, married and unmarried couples and those in polygamous marriages. Couples are treated differently for contributory benefits such as the retirement pension where entitlement is based on lawful marriage. That stems from the national insurance scheme in which, usually, the husband was the contributor and benefits included provision for dependents.
The position is different for income-related benefits, but the issue is not whether a couple are living in or out of wedlock but whether a man and woman form a common household. Where a couple form a common household, it is right that the help that they get takes account of shared costs, such as heating costs. It is a
long-standing principle that unmarried couples should not be treated more or less favourably than married couples. A couple living together as husband and wife should be treated in the same way as a married couple. There are some 270,000 pensioner couples receiving the minimum income guarantee and it is estimated that no more than 10,000 of them are unmarried. That comparatively small number is not a reason for changing the rules of the pension credit. In an increasingly tolerant society, to do so now would seem a backward step.
When a decision-making officer is satisfied that a couple are not living together as husband and wife, separate benefit claims can be made. Rates for couples are lower than twice the single rate. Some 30 per cent. of the households that will benefit from the pension credit will be couples, and 70 per cent. will be single people, of whom more than three quarters will be single women. Clause 5 is important in the calculation of pension credit and without it we would be unable to calculate fairly either the guarantee credit or the savings credit for couples. Single pensioners and couples are entitled to pension credit. It is only right that couples' entitlement should be based on the income and capital of both claimant and partner.
The concept of household membership is an important and long-standing one in social security generally and is especially important in income-related benefits. In seeking to be fair to all, we need to ensure equity of treatment for pensioners, whether single or members of a couple. That is why clause 5 ensures that any income or capital of the partner is aggregated with that of the claimant. That allows us to consider a couple's joint income and capital when calculating the guarantee credit and the savings credit. That arrangement has been introduced from the income support system with the advice of parliamentary counsel.
Amendment No. 26 would remove the regulatory power to provide exceptions to the principle of aggregation. We will accept the proposal simply to allow us to debate the issue. The hon. Members for Daventry and for Hertsmere alluded to the examples in the explanatory notes. They are explanatory, and there is no need for further clarification.
The hon. Member for Daventry was right, and I shall use a phrase that means exactly the same as what he said to his colleague, the hon. Member for Hertsmere—it is a belt-and-braces regulatory power. The hon. Member for Daventry, in his discourse with his colleague, asked whether there was any specific reason for it and whether it could be used in future years, if issues arose. There are no plans to put forward regulations using the power. If we were to use the power at some time in the future, the effect of not aggregating a couple's income or capital is that we would totally disregard the income or capital of the claimant's partner. That can only be an advantage to them.