Clause 10 - Effect of variations under section 7(4)
State Pension Credit Bill [Lords]
5:00 pm
Ms Maria Eagle (Parliamentary Under-Secretary (Minister for Disabled People), Department for Work and Pensions; Liverpool, Garston, Labour)
I confirm that I was talking about retirement provision by means of occupational pensions or other non-state pensions, as defined in the Bill. I reassure the Committee that we shall not end up with assessments that are so far out of date that they are bound to change hugely at the end of five years. That will enable us to deal with known increases in certain elements of pensioners' income without having to bother them about filling in vast numbers of forms. Ignoring increases in second pensions during the assessed income period would mean that pensioners might face a dramatic fall in their pension credit at the end of the five-year period.
We can take known changes in pensioners' incomes into account, but it does not mean that they will have to fill in vast numbers of forms to enable us to do it. We generally know by how much occupational pensions increase. That is relatively well known, and we can ask people to tell us when they first apply. The Government Actuary, for example, tells us that most occupational pensions are uprated by the retail prices index. We know that half of all pensioner households entitled to pensioner credit will have some kind of occupational pension scheme. We can largely work out what the uprating should be with a little bit of information at the beginning.
I hope that that will reassure the Committee that while we are keeping track of increases in retirement provision that have an impact on pension credit, during the assessed income period we will not be getting so far out of date that we will end up with big-bang changes at the end of five years that might overly affect pensioners, and might mean that we are spending far more on pension credit than we would have if we had taken those increases into account. I hope that that explains clause 10 to the Committee. It is about making sure that we can take account of matters during the assessed income period, without the Secretary of State having to make a separate decision on well-known upratings and increases that we know are going to happen.