Schedule 2 - Minor and consequential amendments
State Pension Credit Bill [Lords]
3:45 pm
Ms Maria Eagle (Parliamentary Under-Secretary (Minister for Disabled People), Department for Work and Pensions; Liverpool, Garston, Labour)
The hon. Gentleman has raised a point that has come up in other parts of the Bill. It is obviously important. The amendment is a probing one but it has some faults in the sense that if it were implemented as it stands, it could have perverse effects. I therefore cannot tell him that we love his amendment. It would place an obligation on the Department to ring-fence at least part of the savings credit from the financial assessments undertaken by local authorities when determining an individual' s ability to pay for their residential care.
Local authorities' assessment of the amount that people can pay towards their care costs is a matter for them operating within the Department of Health's guidance. It is not an area of policy for which Ministers in my Department are responsible, which is why it does not appear in the Bill. When Baroness Hollis was asked about this in another place, she reminded the other House that it was a matter for the Department of Health, which indeed it is.
I want to advise the hon. Member for Northavon of the effect of his amendment on individuals and illustrate that it is not so simple to carry it out and ignore the savings credit in the assessment. Random effects would be created. The local authority means test reduces a person' s income—the hon. Gentleman referred to it as pocket money, but many elderly people find that an offensive way of putting it—to £16.80 a week. If the savings credit were to be paid on top, as the amendment suggests, a person with £100 income before the local authority applied the means test would be left with £30.60 after the income assessment. That is because they would be entitled to the maximum savings credit of £13.80 on top of the £16.80 allowed under the local authority means test.
However, a person with £115 original income who was entitled to a savings credit of £7.80, would be left with just £24.60—£16.80 plus £7.80—so some illogical and arbitrary payments would arise. That is why the Department of Health is still considering how best to deal with guidance in respect of the pension credit and its impact. We intend, however, that pensioners in residential care homes will be treated in the same way as other pensioners. The Department of Health is
looking at the detail. I cannot tell the hon. Gentleman how far it has got with solving this problem, but that is the position. I hope that that reassures the hon. Gentleman that we intend to ensure that everyone benefits and that he will not press the amendment, but he may feel inclined to do so.