Clause 21
9:15 am
Paul Rowen (Rochdale, Liberal Democrat)
The clause deals with state pension credit, and we welcome its provisions, which introduce the possibility of pilot schemes of up to two years to increase the uptake of pension credit. The clause allows regulations to be made, permitting the payment of a state pension credit without a claim being made, and with modified rules concerning how the entitlement is to be determined. The success of such pilots will be judged on whether there is an increase in individuals claiming and receiving state pension credit. The pilots will last for up to 36 months.
The benefit, which was introduced to raise people above the poverty line, is failing due to a lack of uptake. It has increased, but after many years confusion about the pension system remains, and that is exacerbated by the complex bureaucratic forms that pensioners must fill out, and the means-testing to which pensioners are subject, in order to receive their benefits. The system does not deal with the needs of pensioners, as half of people over 65 years old do not like or seek financial advice. Indeed, Citizens Advice figures for 2006-07 showed that only 10 per cent. of its clients were over 65—half the percentage of pensioners over that age as a proportion of the total population. Without essential advice, those who need pension credit—vulnerable individuals—do not get it, because they are unaware of their rights.
There should not be any means-testing for pension benefits, because the system puts off older people from applying for certain benefits, and they end up losing in other areas. Uptake of pension credit is also further diminished by the fact that one in eight pensioners have still not heard of pension credit. These problems have, we estimate, led to £2.37 billion of pension credit going unclaimed. As such, each person loses on average £26.40 in unclaimed pension credit, an amount that could make a huge difference to people’s lives. Up to £5 billion of other essential benefits for older people are never claimed either, and against that background the clause is welcome because it seeks to extend state pension credit and to ensure that those who, for one reason or another, are not prepared to navigate the complex web of forms receive state pension credit.
The amendments would extend the pilots to include carer’s allowance in the pension credit scheme to ensure that carers who are entitled to pension credit are automatically assessed for entitlement to carer’s addition, which provides £27.75 in addition to the pension credit. If the automatic assessment is based only on income, some older carers may be left out when they would be entitled to pension credit if their caring responsibilities were known.
At present, carers must apply for carer’s allowance to receive the carer’s addition, which cannot be paid alongside the state pension, and then reapply for carer’s addition. That process would be much simpler if the carer’s allowance was integrated with the pension credit pilots. We welcome the pilots, but we hope that the Government will accept that it is sensible to include carers in the amendment.