Clause 13 - Transitional provisions
State Pension Credit Bill [Lords]
5:30 pm
Mr Tim Boswell (Daventry, Conservative)
The amendment raises one or two primarily administrative points about the transitional period. I shall follow the numerical order of the amendments and deal first with amendment No. 34, which is relevant to some of the administrative points that I shall touch on in a moment.
The provision is that an assessed income period—this matter was discussed at length during the enforced absence of the Under-Secretary and myself this morning—may be normally no longer than five years and may be shorter. I am seeking a declaration from the Minister that there will be no circumstances in which a claimant loses out because that period is defined as a longer period. We shall come to the reasons why it is so defined in a moment. I do not think that there will be such a case, but I should like an assurance on the matter.
The issue is then about prescribing a longer assessed income period and why that is mentioned. The explanatory notes to the Bill, ever helpful, are quite interesting on that point. The set of arguments are perfectly understandable. The notes explain, for example, that people already on income support will not have to make a fresh application and go through a fresh form and all the rigmarole of a new claim for pension credit. It will be passported, to use a shorthand term, from their existing income support on to their pension credit.
I want to make a point of substance on that issue, to which the Help the Aged briefing refers. It quite reasonably says that not everyone who may benefit from the pension credit arrangements is now on the minimum income guarantee or income support. It says, of course, that the savings credit applies only to people over 65, and some may not be eligible for the guarantee credit. That organisation is concerned about protecting the entitlement of such people and providing a fast-track claims procedure for people who are waiting for their benefit. The Minister may like to reflect on that.
There is also a general point about the administration of the benefit, which goes back to points that we made in the clause 10 stand part debate about the robustness of the IT systems for the Department. Let us consider the explanatory notes to clause 13(2) and amendment No. 36, which would remove the power to prescribe a longer period. The message from the notes is that many people will be coming on to pension credit in 2003, and on the assumption of a five-year assessment period, they will refresh their claims in 2008. I re-read the explanatory notes and did a double take because I had assumed that they would say 2003, but I read 2008. The Minister may want to comment on that.
It seems clear that there will be fewer people to have a renewed assessment period in 2008 than those in 2003. I think that the answer to the conundrum is that many of those in 2003 will be on income support and will be transferred to pension credit without a fresh set of procedures, whereas in 2008 they will all be asked to produce further details or there will be a discussion with the Pension Service as to whether their benefit should be modified. I was puzzled because if it was necessary to make that special provision for 2008, I am not sure that there may not also be a problem in 2003, when the benefit comes on-stream.
It is true that many of those people will already be on an income-related benefit such as income support and they will transfer to the new benefit. However, if we consider the mass of claimants in October 2003 and compare that with the potential mass of the re-claimants in 2008, it becomes clear that during that time many of them will have made a fresh application anyway if their incomes have declined or they have had another change of circumstances. Others—perhaps this is the most extreme change of circumstance—will sadly have died during the period. Others will go through the process for the second time during their life as a pensioner. The Minister should explain what the weight of cases may be between the two. The system may require changes, or people may be allowed further time in 2008 because of the rush of claims. I am concerned that the initial claims in 2003 will also overload the system, especially as they will be on an old computer system that may not be able to cope. Amendment No. 34 probes that issue, and I hope that the Minister will respond.
On amendment No. 36, I hope that the Minister can assure us that any extension of the period will not be to the detriment of the individual. We will not press the matter to a vote, but would like the Minister's assurance about what is going on. Even if everything is lickety-split, and there is no loss to the claimant, there is a danger that if the claimant has not received a form from it, the Pension Service may not pick up the fact that he or she is entitled to more benefit. As we know, there is a qualifying period for making claims for benefit. Someone may not have had contact with the Pension Service for the perfectly good reason of administrative overload. I am anxious that they should get back what they would have had within the usual five-year cycle if they had been invited to apply and had done so.
Mr. McCartney: Clause 13 provides the Government with a power to regulate the smooth transfer of pensioners from the current system of financial support and income support to a state pension credit. The probing amendment gives us an opportunity to set out the transitional arrangements in some detail. This is a massive exercise, and enacting the Bill is the easy part, if hon. Members do not mind me saying so. I reassure the Committee that a great deal of effort has been spent on the implementation strategy, and a great human and financial resources have been made available to ensure the smooth operation of pension credit in a rolling programme over the next few years to access the system. I shall write to the hon. Gentleman and to the hon. Member for Northavon if they want regular updates. It is in all our interests that the system is open and transparent.