House of Lords written question – answered on 19th December 2012.

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Photo of Lord Taylor of Warwick Lord Taylor of Warwick Non-affiliated

To ask Her Majesty's Government what steps they will take to minimise the impact of the 1% cap on benefit rises announced in the Autumn Statement on the poorest 30% of the population.

Photo of Lord Freud Lord Freud The Parliamentary Under-Secretary of State for Work and Pensions

Despite the difficult economic conditions, the Government will protect the most vulnerable in the up-rating of benefits and pensions. We have continued to protect disabled people whose added-cost needs are linked to price inflation; we have maintained our commitment to increasing the basic state pension by the highest of prices, earnings or 2.5%; and we will increase the standard minimum guarantee in pension credit to ensure that the full increase in the basic state pension is received by the poorest pensioners, off-setting the cost through an increase in the savings credit threshold.

Premia paid to pensioner recipients of working-age benefits will continue to be up-rated to match pension credit rates, and premia paid to disabled people receiving working-age benefits, and the support group component in employment and support allowance, will be up-rated in line with the Consumer Prices Index.

For those in the labour market, work remains the best and most immediate route out of poverty and we have continued to prioritise providing the best possible work incentives through welfare reform. Government are keen to ensure that benefits are well targeted and fair, and it is estimated that around 3.1 million households will have higher entitlement as a result of universal credit, with around 75% of these households in the bottom two quintiles of the income distribution.

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James Nelson
Posted on 20 Dec 2012 9:36 pm (Report this annotation)

But they give 0.0% indexation to pensioners who have chosen the wrong country in which to spend their twilight years.

Peter Morris
Posted on 21 Dec 2012 10:11 am (Report this annotation)

The Minister makes a big deal out of treating pensioners so well, including half a million who live in certain overseas countries. However, he fails to mention how badly he treats another half a million pensioners living in mainly Commonwealth countries who have their state pensions frozen at the rate at which they are first paid. Despite everyone having paid exactly the same into the NIF under exactly the same rules.