State Benefits: Hospital Downrating Rule

– in the House of Lords at 2:58 pm on 17 October 2001.

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Photo of Baroness Greengross Baroness Greengross Crossbench 2:58, 17 October 2001

asked Her Majesty's Government:

What plans they have to review the hospital downrating rule for the state pension.

Photo of Baroness Hollis of Heigham Baroness Hollis of Heigham Parliamentary Under-Secretary, Department for Work and Pensions, Parliamentary Under-Secretary (Department for Work and Pensions)

My Lords, the department, in conjunction with the Department of Health, is looking at issues affecting hospital in-patients. The rules governing the downrating of benefits are being reviewed.

Photo of Baroness Greengross Baroness Greengross Crossbench

My Lords, I thank the Minister for that reply. Does she agree that it would be very much in keeping with the Government's policy towards poorer people to address this issue now and to update the policy in a way that would be more suited to the 21st century rather than to apply the policy formulated in 1948?

Age Concern has recently drawn attention to the anomalous downrating rule. It is odd that pensioners are the only people who are forced to pay to stay in hospital. More than 30,000 pensioners in the year 2000 had their pensions docked for being in a hospital for too long. Approximately £60 million was taken from state pensions. Pensioners believed that they had earned and saved that money during all their working days. Is the Minister aware of any private pension provider that cuts benefits?

Finally, does she agree that people who stay in hospital for a fairly long time--say, six weeks--are likely to be rather ill; otherwise, in theory at least, they would be transferred to long-term care settings? Many geriatric beds have now gone. Does the Minister agree that a review is needed on this policy as soon as possible, both formally and openly?

Photo of Baroness Hollis of Heigham Baroness Hollis of Heigham Parliamentary Under-Secretary, Department for Work and Pensions, Parliamentary Under-Secretary (Department for Work and Pensions)

My Lords, the noble Baroness is well known to the House for her honourable advocacy of the concerns of pensioners. I am sure that we all support her in that. However, over and beyond the question of cost, I believe that two considerations make this a complicated issue. The first has been the long-standing provision since 1948 that there should not be double-funding. In other words, if one receives a widow's benefit, one does not also receive retirement pension; and if one receives income support or related benefits, one does not also receive free provision for one's care, and so on, in hospital. Therefore, if we were to move away from that principle, a read-across over the whole social security system would have to be explored.

The second consideration was also raised by the noble Baroness; that is, the read-across to people in private residential care and local authority homes who, after 12 weeks, have all their benefit taken towards their charges, apart from £16 a week pocket money. I believe that it would be invidious if people in long-stay hospitals were to keep every penny of their benefit. Most of the benefit received by people in residential care goes towards their care. Therefore, although I am sympathetic to the point raised by the noble Baroness, we need to explore the real issues associated with this matter.

Photo of Lord Higgins Lord Higgins Conservative

My Lords, In the light of the Minister's forthcoming initial reply, does she agree that the report by Age Concern entitled, Penalised for Being Ill is timely. The Government statistics seem to be extraordinarily out of date. The figure of £60 million for the abolition of the rule, which was given just before the Recess, is exactly the same as that given four or five years ago by the previous Conservative Government, which cannot possibly be right. The Government apparently have no idea of the administration costs. Will the review which the Minister mentioned take into account the need to ensure that those who have benefits withdrawn have them reinstated immediately they leave hospital?

Photo of Baroness Hollis of Heigham Baroness Hollis of Heigham Parliamentary Under-Secretary, Department for Work and Pensions, Parliamentary Under-Secretary (Department for Work and Pensions)

My Lords, I agree with the noble Lord that it is likely that the figures offered by the previous Conservative Government were not accurate. That may well be the case. I am sure that the House would like to hear the figures I have. My understanding is that to remove the six-week rule for pensioners would cost about £30 million; to remove the fifty-two week rule for pensioners would cost £60 million, and to remove the rule for other people on related benefits would cost another £40 million. That would cost around £100 million in total. It may be that the noble Lord has other figures. However, I would not rely too much on the accuracy of the previous set of figures.

Perhaps I may correct a possible misapprehension by the noble Lord. I did not say that there is a review, but that we were keeping benefits under review--as we do with all such benefits--which is rather different.

Photo of Baroness Pitkeathley Baroness Pitkeathley Labour

My Lords, does the Minister agree that although there are undoubted savings associated with being in hospital, there are also undoubted extra costs. I refer, for example, to particular kinds of food which may need to be purchased, and to the cost of visiting for spouses and relatives.

Photo of Baroness Hollis of Heigham Baroness Hollis of Heigham Parliamentary Under-Secretary, Department for Work and Pensions, Parliamentary Under-Secretary (Department for Work and Pensions)

Yes, my Lords. At present, the effect of the charges on a pensioner couple, if one is in hospital for more than six weeks, is an approximate reduction of five per cent of their joint pension income. That is for a 52-week period, which, given the reduction in the cost of food, and the like, I believe most people would not think unreasonable. I take the point made by my noble friend about transport. First a relative or carer on income support or JSA would have access to the social fund community care grants, which are available for transport to hospital. I am assured by my noble friend Lord Hunt that the Department of Health is currently considering the wider issues of transport raised by the Kennedy report.

Photo of Earl Russell Earl Russell Liberal Democrat

My Lords, I refer to the figures given by the Minister to the noble Lord, Lord Higgins, about the cost of any change. Are those changes exclusively in the budget of the Department of Social Security, or do they take account of administrative costs falling on the National Health Service?

Photo of Baroness Trumpington Baroness Trumpington Conservative

My Lords, can the Minister tell the House whether people in hospital would have access to the social fund to pay for rent, rates and other weekly expenses? I do not refer to the cost of food. If that is not the case, people will get into debt.

Photo of Baroness Hollis of Heigham Baroness Hollis of Heigham Parliamentary Under-Secretary, Department for Work and Pensions, Parliamentary Under-Secretary (Department for Work and Pensions)

My Lords, for a person whose benefit is reduced after six weeks there is a reduction of £28 for a single person and £14 a week for a couple. Housing benefit, council tax and the like are not affected. The reduction is from their total income. Therefore, their housing situation--rent and rates--will continue unchanged for 12 months. After that, because housing benefit and council tax benefit are renewed and reviewed every year, it would become a matter for the local authority.

Photo of Baroness Crawley Baroness Crawley Labour

My Lords, does my noble friend agree that one of the main wishes of pensioners in hospital is to return home as soon as possible and, when they do so, to be as independent as possible? Can she tell the House what the Government are doing to support pensioners in that way?

Photo of Baroness Hollis of Heigham Baroness Hollis of Heigham Parliamentary Under-Secretary, Department for Work and Pensions, Parliamentary Under-Secretary (Department for Work and Pensions)

Yes, my Lords. The main push of government policy is for community care. The Department of Health has recently announced not just that £1.4 billion is to go into the nursing home sector, but that there will be a further £300 million to end bed blocking. Over and above that, I am pleased to tell the House that my own department has put together what I consider to be a good package of support for carers, which includes respite care, and has developed direct payments for elderly people so that they can employ the health and support services they need. I am sure that every one of us would wish, if at all possible, to live in our own homes. Our aim is to ensure that all people, irrespective of income, have a similar choice.