New Clause. — (Extension of Period for Obtaining Benefits.)

Orders of the Day — NATIONAL INSURANCE &c. BILL – in the House of Commons at 12:00 am on 3rd December 1964.

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Regulation 12 of the National Insurance (Claims and Payments) Regulations 1948 shall have effect as if for the reference to a period of six months there were substituted a reference to a period of twelve months.—[Mrs. Thatcher.]

Brought up, and read the First time.

9.0 p.m.

Photo of Mrs Margaret Thatcher Mrs Margaret Thatcher , Finchley

I beg to move, That the Clause be read a Second time.

Photo of Mr Barnett Janner Mr Barnett Janner , Leicester North West

It may be for the convenience of the Committee if, with this new Clause we discuss new Clause No. 3—Extension of period for claiming benefit.

Photo of Mrs Margaret Thatcher Mrs Margaret Thatcher , Finchley

That would certainly be suitable, Sir Barnett.

Time limits are an old feature of insurance legislation, and towards the end of my time in the Ministry I took special interest in certain of these time limits because some of them appeared to me, as a lawyer, to be particularly harsh. During last year we looked once again, through the National Insurance Advisory Committee, at the time limits for claiming sickness benefits, and those were revised. In this new Clause and in new Clause No. 3 I am drawing attention to other time limits which operate particularly harshly.

I refer, first, to the time limit under which a benefit can be extinguished if the order is not cashed within a certain time. The only long-term benefit to which I am entitled happens to be one under the Family Allowances Scheme, but the same rules apply to other order books. It will be found that if the weekly order is not cashed within six months, all right to the amount on the face of that order is extinguished.

Like many other people, I had not read the small print on the order very closely before I went to the Ministry. I may have read it when I first received the book, but that was a long time ago, and I had forgotten that if the order was not cashed within that time one lost right to benefit. The period used to be three months, but it was raised to six months. But there is an absolute bar to benefit if an order is not cashed within that period.

This bar occurs under the Claims and Payments Regulations, 1948, which have been amended since and are now extremely complicated. Some of the regulations no longer exist. Nevertheless, there is still an absolute bar to a person's receiving benefit if he has not cashed the order within six months.

This can give rise to considerable hardship. Let us take the case of a mother who is thinking of accumulating her family allowances after Christmas. Her son or daughter may be going to a grammar school or secondary modern school in September, and a new uniform may be required. So she decides to accumulate her family allowances between Christmas and, say, September. She then goes to cash the whole lot at the beginning of September in order to receive a nice lump sum to pay for the uniform, but she discovers that all those allowances which were due to be paid in January and February are out of time, and that try as she may she will have to forfeit those amounts altogether.

A similar regulation applies to postal drafts received from the Ministry. A postal draft in relation to sickness benefits may have been claimed. The title to that benefit will have been investigated and agreed by the Ministry and when that postal draft is sent out it is agreed that the person to whom it is sent has a right to the sum on the face of the draft. There is no difficulty about investigating that part of the transaction again.

The draft may then be put in a drawer, because somebody is ill in the house, and may be forgotten for six months Many other types of drafts cannot be cashed after six months, but title to the sums on the faces of those drafts is not lost. But if a person with a postal draft for sickness benefit goes to the Ministry and says, "Please will you replace this draft with another for the same amount?" he learns for the first time that there is an absolute bar of six months to that benefit. If the draft has not been cashed, it is not only that instrument which is non-encashable, it is the title to the benefit which has disappeared. Once or twice, towards the end of my time in the Ministry, I made inquiries about this, and there was always some reason why we should not extend the period. Nevertheless, I am anxious that the National Insurance Advisory Committee should now look at this problem again.

I understand that the main problems remaining are administrative and that, once the period of title is prolonged, the Ministry would have to keep so many forms and orders that they would need far more extensive storage space. Nevertheless, to a lawyer who is used to dealing with claims and with evidence which may relate to matters which happened up to six years back, the period of six months seems very short indeed. It is said with regard to the orders which appear in books—where one has a book, which usually lasts for a year—that when one signs that order one signs that certain conditions have been fulfilled, that one has not been in hospital, for example, or that one's earnings were not more than a certain amount.

A part of the reason why it is said that the period of the claim could not be extended is that it would be difficult for a person to remember what happened as far back as six months or longer than six months, and difficult for the Ministry to investigate. As a lawyer, one remembers many occasions in court when evidence is given about an accident which took place two or three or even four years before the court action. Witnesses have no difficulty in recalling the facts of the case.

This does not happen in many cases. Sometimes the facts are there and are ascertainable, but even so the bar is absolute—even where all the facts have been proved without dispute. There is still then an absolute bar to benefit. This is a very modest Amendment. It asks that the period should once again be moved from six months to 12 months. Alternatively, I would ask the right hon. Lady if the matter could once again be referred to the National Insurance Advisory Committee.

There is, of course, another aspect to this particular group of Regulations and that concerns problems such as retirement pensions. Here, also, there is an absolute bar of six months. In the first place it is three months, which can be extended to six months if good cause for delay in claiming is shown, but there is an absolute bar of six months in claiming arrears of benefit. This can give rise to considerable individual disappointment in cases such as that of a deserted wife who is entitled to retirement pension on her husband's insurance. She is no entitled to that pension until her husband retires. She may not have heard from her husband for some time and she does not know when he actually retires. Her only way of finding out is by persistently making inquiries from her local National Insurance Office. Cases have arisen where deserted wives have heard that their husbands have been retired perhaps for a year or more. That, if known, would have entitled them to pension for a year or more, but when they go to the office they are told that there is an absolute bar to arrears of pension after six months.

Occasionally, we came across the sort of case where people believed that the earnings rule still persisted beyond the first five years after retirement. One could get a man of, say, 72 still earning, and his family believing that he is not entitled to pension because he is earning more than £5 or £6 a week. He then learns, perhaps by accident, that he would have been entitled to a pension because the earnings rule ceases to operate for a man aged 70. He is very pleased, because he thinks that he has one or two years' pension in hand. But he learns that, at the most, he can get benefit for only six months back.

Some of these rules have been changed before. Last year we looked at the time limits for sickness benefit. I understand that neither the Parliamentary Secretary nor the right hon. Lady can accept today an Amendment designed to provide for a straight increase from six months to 12 months, but I think that we might ask the National Insurance Advisory Committee to look at this again, with a very strong indication that we should like this time limit extended. I say to the Parliamentary Secretary that this was one of the bees that I had in my bonnet and it will go on buzzing. I shall be very glad if he can give me an assurance that this will be referred to the National Insurance Advisory Committee or that he will look at the problem.

Photo of Mr Harold Davies Mr Harold Davies , Leek

I am sure that hon. Members will be grateful for the way in which the hon. Lady the Member for Finchley (Mrs. Thatcher) has put the problem. In view of that, and because many hon. Members were up late last night, I propose merely to try to deal with the main points. I hope that I shall be able to assure the hon. Lady that it was well worth while to move this Motion, as undoubtedly it has resulted in an addition to the wealth of information which is being built up all over the country about the problem of the Welfare State of the future—a phrase which has been agreed by hon. Members on both sides of the Committee.

The new Clause under discussion seeks to extend the time limit in which retirement pensions and widows' benefits may be claimed and the limits within which payments of national insurance benefits can be claimed. It is quite clear that the question of the payment of pensions in arrears is one which has worried the hon. Lady and it may be that it has worried other hon. Members. The hon. Lady drew a comparison between that and cases which she has encountered in her experience as a lawyer, but I think that they are problems in different categories. A few observations on the new Clause may, however, be of some worth to the Committee.

Its provisions would affect only claims to retirement pension and widows' benefit. New Clause No. 3, of itself, would not extend the period to 12 months in which arrears on claims might be paid. A further provision in the regulations which precludes the payment of arrears over a period of more than six months would have to be amended, and that is a provision to which this Clause does not apply. The time limit to which I have referred was reviewed this year and approved by the National Insurance Advisory Committee. There is a further regulation affecting retirement pensions, specifying the notice of retirement which must be given, which could affect the payment of arrears. This would need a further amendment which is not provided for in the new Clause.

Time limits on payments and claims were examined from 1950 to 1952 by the National Insurance Advisory Committee which, in its 1952 Report, supported the existing arrangements in general. Although I do not suggest that we should slavishly follow the Committee's main reasons, it is probably worth while mentioning them. First, entitlement to benefit does not depend on retirement or on widowhood alone. Secondly, continuing conditions affecting benefit must be satisfied—namely, the earnings rule for retirement pensioners, reductions for periods in hospital, the effect of overlapping benefit rules, eligibility for dependency allowances, absence abroad and so on. All those possibilities have to be taken into account.

9.15 p.m.

If we were not careful, we would be confronted with the difficulty of establishing the facts in regard to past periods during which claims were made. These types of payment were originally worked out on the basis of weekly national insurance benefits which were regarded, even by Beveridge and the first post-war Labour Government—and by the present Opposition when it was in Government—as being primarily for current maintenance.

The effect of the other new Clause would be to extend from six months to 12 months the period in which benefit payments might be obtained, and a few observations on the scope of the Clause might be worth while at this stage.

The rules governing extinguishment to benefit after six months were approved in 1952 by the National Insurance Advisory Committee in the Report to which the hon. Lady and I have referred. An additional point that has not been mentioned is that we are not here dealing with a few cases. The result would be that storage of many million more paid orders would have to be provided for, and it is doubtful how far the increased administrative costs would be justified. The total number of extinguishments is very small indeed in relation to the very many millions of payments made, but that does not mean that we ought to brush aside these two new Clauses.

There are practical difficulties to this and my right hon. Friend has agreed that we would be prepared to look into the problem. While I cannot give any assurance now, I hope that the hon. Member for Finchley will accept that we are prepared to look into this—and I am not discussing the general review to which so much reference has been made. Outside of that we are ready to look into this question. I hope, therefore, that the hon. Lady will be prepared to withdraw the Motion, because the spirit in which she has posed the questions involved has resulted in an exploratory debate and is a constructive contribution to the search for an answer to problems which, we hope, some day very soon to be able to solve.

Photo of Mrs Margaret Thatcher Mrs Margaret Thatcher , Finchley

I thank the Joint Parliamentary Secretary very much, but I am a little disappointed. He gave the same arguments which I know backwards, although he sounded as if he actually believed them. I do not think that I ever sounded as if I believed them. Indeed, I do not think that I ever gave them from the Dispatch Box.

However, the year 1952 is a long time back and it was then that the National Insurance Advisory Committee last looked at this question. Some of the reasons which the Committee then advanced for retaining the strict time limit are very out of date. For example, one reason was that this is a weekly benefit, meant for weekly outgoings. That reason bears no relation to modern life. The rates do not come in weekly, and even the Ministry itself will pay retirement pensions quarterly. Now all kinds of people draw retirement pensions and it is nonsense to say, "If you do not draw it weekly you do not need it and must therefore lose your right to it."

This is very much a picture of an old welfare scheme not at all suited to modern needs. I hope that, as a result of this discussion, the Joint Parliamentary Secretary has his prejudices in the right place and that his prejudices are in favour of a longer time for claiming benefits.

Photo of Mr Harold Davies Mr Harold Davies , Leek

The hon. Lady must not jump to conclusions. It was only because of her prepossessing smile and the charming way in which she moved the Motion that I did not want to enter into a cut and thrust debate. I think this is a constructive proposal and I do not want to draw too much attention to the fact that it is only a few months since the time limit for claiming sickness benefits was reviewed and the maintenance of those limits was recommended in Cmnd. 2400.

Photo of Mrs Margaret Thatcher Mrs Margaret Thatcher , Finchley

I appreciate what the hon. Gentleman says and I am not getting involved in a cut and thrust debate either. If he thinks that this is cut and thrust he should see me when I really get going. In case I do get going, it will be as well if now, Sir Barnett, I beg to ask leave to withdraw the Motion.

Motion and Clause, by leave, withdrawn.

Schedule 1 agreed to.