Clause 8 - Fresh determinations increasing

Part of State Pension Credit Bill [Lords] – in a Public Bill Committee at 12:15 pm on 23 April 2002.

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Photo of Ian McCartney Ian McCartney Minister for pensions, Department for Work and Pensions 12:15, 23 April 2002

I hope that I can clarify this quickly for the hon. Gentleman, because clause 8 is designed to protect pensioners. It ensures that, whatever the changes in their income, pensioners have a right to a fresh determination of entitlement if that will result in their being awarded more credit. We have already discussed our objectives in introducing the assessed income period in the debates on clauses 6 and 7. It is designed to enable the abolition of the weekly means test, to put an end to intrusion and to introduce simplicity and transparency. It is fixed for five years and is available from the age of 65, when most pensioners' income has stabilised.

We want pensioners to benefit from the assessed income period. I accept in good grace that this is a probing amendment that is designed to find out whether the assessments are to be done for a reasonable purpose. Our intentions are plain and simple. Some pensioners may see drops in their income over the five years of the assessed income period, for example, if they choose to spend some of their savings. We do not want them to lose out and have to wait up to five years to have their entitlement reassessed. That could cause hardship or mean that they are living below the level of the guarantee, which would defeat the whole object of the measures. We want to take account of change when it happens, but only where it is to their advantage. Obviously, we need to look at their retirement provision to check their entitlement and take account of any changes to other income in the normal way.

If a pensioner's income has gone down, we will not wait until the end of the assessed income period to increase their pension credit entitlement; it will be increased immediately. If it turns out that their income has increased rather than decreased, they will keep the benefit of the increase for the remainder of the assessed income period. I was trying to make that point earlier—it is vital. It is important for pensioners not to be put off by the assessment.

There are no disadvantages to this system, only advantages—it is a virtuous circle. Giving pensioners all the advantages of a fixed income assessment without any of the disadvantages is a major change when it comes to benefits.