Pensioners (Capital Limits)

Oral Answers to Questions — Work and Pensions – in the House of Commons at 2:30 pm on 15th October 2001.

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Photo of Bridget Prentice Bridget Prentice Labour, Lewisham East 2:30 pm, 15th October 2001

What progress is being made to reform social security regulations governing capital limits for pensioners.

Photo of Ian McCartney Ian McCartney Minister for pensions, Department for Work and Pensions

We have already taken steps to reform capital limits for pensioners. In addition, the pension credit consultation paper set out our proposals for abolishing both the capital limits and the assumed £1 a week rate of return for every £250 of capital for pensioners.

Photo of Bridget Prentice Bridget Prentice Labour, Lewisham East

I am grateful for that reply, but I am sure that my right hon. Friend will have constituents, as we no doubt all do, who, as pensioners, fall between two stools. What guarantee can he give that, when the pension credit is introduced, people who have some savings do not lose out on other benefits?

Photo of Ian McCartney Ian McCartney Minister for pensions, Department for Work and Pensions

That is a fair point, and we have two measures in place to respond to it. On top of the guaranteed minimum, we will pay a cash award of about 60p for every £1 of a second pension or savings income, which solves the first problem that my hon. Friend highlighted, concerning individuals with modest savings or small second pensions being disadvantaged because of their thriftiness. Secondly, when more pensioners get more help through the pension credit, that will generally mean more help through housing benefit and/or council tax benefit. We are considering what changes are needed in the design of housing and council tax benefit to ensure that they complement the more generous rules that will apply in pension credit.

Photo of Ms Annabelle Ewing Ms Annabelle Ewing Scottish National Party, Perth

While we are dealing with pensioner benefits, I should like to ask the Minister whether the reports that appeared in the Scottish press at the weekend—to the effect that the Secretary of State has refused on behalf of the United Kingdom Government to continue to pay attendance allowance with respect to Scottish pensioners following the implementation in the Scottish Parliament of the proposals on free personal care for the elderly—are correct. If so, does that not breach the current principle of the universality of benefits throughout the United Kingdom and hence amount to discrimination instigated by the United Kingdom Government against Scottish pensioners under the current benefit system?

Photo of Ian McCartney Ian McCartney Minister for pensions, Department for Work and Pensions

I give the hon. Lady an absolute assurance: we are keeping the United Kingdom benefit system. That is the whole point of my right hon. Friend the Secretary of State's contribution to the debate. I assure the hon. Lady that the Government, working closely with our colleagues in Scotland, do not intend to disturb the arrangements within the United Kingdom and the national benefits system.

Photo of Frank Roy Frank Roy Labour, Motherwell and Wishaw

My right hon. Friend will be aware that, at the moment, pensioners in this country who have received incapacity benefit move from that benefit to their old-age pension. Some 160,000 people have done so this year. They are paid incapacity benefit until their 60th or 65th birthday. However, is my right hon. Friend aware that there is a week between their birthday and the date on which they receive the benefit of their state pension? Does he agree that that anomaly should be looked at as quickly as possible?

Photo of Ian McCartney Ian McCartney Minister for pensions, Department for Work and Pensions

I will write a note to my hon. Friend. That anomaly has always existed, but those involved get the income that they are entitled to, and I shall send my hon. Friend a chart showing how that works.