Tag Archives: pension credit

Social Security watchdog warns ministers of flaws in the scheme to scrap pensioner winter fuel allowances

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Department for Work and Pensions

In a polite but tough message to Liz Kendall, the work and pensions secretary, the Government’s official advisory body on social security, has exposed flaws in the government’s implementation of its rushed policy to abolish winter fuel allowances for 9.3 million pensioners and encourage the poorest to claim pension credit.

It also undermines the government’s case that it couldn’t consult them in advance because of the short timetable Sir Keir Starmer and chancellor Rachel Reeves imposed on introducing the change.

Dr Stephen Brien, chair of the Social Security Advisory Committee, says in a letter to Liz Kendall, ” I trust you will agree, there are considerable benefits in draft legislation being presented to us for statutory scrutiny before being laid, and that ‘urgency’ should be used only in exceptional circumstances. This Committee has a strong track record of supporting successive Secretaries of State respond at pace to emerging crises and risks. We have often arranged additional meetings to enable scrutiny to take place at short notice, in an attempt to avoid the need for invoking the urgency procedure. ”

In other words; ” we could have accommodated you, if only you had asked.”

The letter goes on to point out problems implementing the plans to increase the uptake in Pension Credit and outline flaws in the changes.

It reveals that although the ministry is committed to recruiting an extra 450 staff to cope with the demand for new pension credit claims not one of them can start handling a single claim for two months because they need training.

As the committee points out:” we remain concerned about the capacity of the Department to process Pension Credit claims in a timely way, ensuring that not only are people able to establish entitlement to Winter Fuel Payments, but also that they can be paid this Winter – at the point at which they are needed most.”

In other words ” given your timetable some of the poorest could wait to winter 2025 to get a penny”.

And it questions the headline figure of £1.3 million savings pointing out it could vary because of the extra costs of paying out more pension credit. The government only provides one example – assuming a 5 per cent extra take up from the 880,000 who could get it.

The letter says: This figure is ” representing a little over 100,000 additional households. We have not been presented with any rationale for such a central case estimate (corresponding to a closing by just 14% of eligible non-recipients).”

The committee would expect the government to provide a range of estimates – and points out that if they don’t provide one, the Office for Budgetary Responsibility will do it for them in the Budget.

It adds; ” this is no substitute for the Department’s timely analysis in support of its own proposals disconnected from the Budget process.”

5000 pensioners could be worse off by switching to pension credit

When it comes to flaws the most glaring one affects a small minority of 5,000 of the 10.8 million pensioners who are affected who claim child tax credits. If they claim pension credit to get the fuel allowance , it reveals, THEY COULD BE WORSE OFF because they lose the child tax credit. And the Department has not even told them.

The letter says: ” In the absence of any tailored communications for this group during the current take-up campaign, the Committee is concerned about the potential for confusion about what this group should do. In particular, there is a potential risk that some people may take steps to move onto Pension Credit in the belief that this would be beneficial, but ultimately be financially disadvantaged.”

It calls for an urgent change to the regulations to allow any pensioner who inadvertently does this to revert back to the existing system.

Then there those on housing benefit – a means tested benefit which does not qualify by itself for pension credit.

The committee says: “The Committee understands that take-up of pensioner Housing Benefit is higher than for Pension Credit and that around 120,000 pensioners on HB only might qualify for Pension Credit if they claimed it.”

It urgently recommends that these people are passported straight onto pension credit for this year only while their claims for pension credit are checked.

Finally there are the disabled. “The Department estimates that around 71% (1.6 million) of people with a disability will lose entitlement to the allowance.” Again the committee calls for the government to target those people who claim means tested benefits because they are disabled to make them aware of pension credit.

It goes on to criticise the government for not having an impact assessment of its own proposals – Sir Keir Starmer thought it wasn’t necessary – and warn the government that the Public Sector Equality Duty could be breached.

“Having identified any disparities in impact across protected groups, we would like to have a greater understanding of how this evidence has influenced, and been reflected in, the regulations. For example, what anticipatory actions have been taken; and what types of disparity are considered a necessary consequence of the policy intent?”

In fact according to the Office for National statistics the cuts are aimed almost exclusively at white British people – only five per cent of those affected are from ethnic minorities.

This again shows how rushed regulations can be full of holes and unintended consequences and that neither Sir Keir Starmer nor Rachel Reeves took enough care over drafting them. Perhaps they genuinely don’t care, as pensioners can’t play a role in their growth plans and the sooner they die off the better. I wonder whether either of them have any grandparents.

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House of Lords slams scrapping of winter fuel allowance for 10.8 million pensioners in advance of Commons debate this week

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Lord Hunt of Wirral, chair of the Lords secondary legislation committee and a former energy minister under Lady Thatcher’s government Pic credit: Official Portrait House of Lords

UPDATE: Government got policy through the House of Commons by 348-228 on September 10. Tories, Lib Dems, Greens, Scot Nats, DUP, Alliance and Reform voted against. Some 53 Labour MPs abstained, one Labour MP voted against.

SECOND UPDATE: A Conservative motion regretting the means testing of the winter fuel allowance and the lack of transparency by Labour was passed by 164 votes to 132 in the House of Lords on Wednesday evening. An attempt by a former Tory pensions minister,Baroness Altmann to annul the cut was heavily defeated.

Infected blood victims may also face further delay for compensation say peers

Peers have slammed the government’s planned means testing of this year’s £200 and a £300 winter fuel allowance for the over 80s which will leave 10.8 million out of 12.3 million pensioners with no money before Christmas.

The Lords secondary legislation committee – which scrutinises laws introduced by government by issuing new regulations which have to be approved by Parliament -is severely critical of the changes, the lack of information, the by passing of proper scrutiny by a government appointed advisory committee and lack of evidence of any research by the Department for Work and Pensions of the effect of the changes.

The committee represents a wide range of peers in the House from Tories, Labour, Liberal Democrat and crossbench peers Including former Labour minister, Tom Watson.

Peers see no need for the urgency to get the change into law by September 16. “We are unconvinced by the reasons given for the urgency attached to laying these Regulations and are particularly concerned that this both precludes appropriate scrutiny and creates issues with the practicalities of bringing in the change at short notice,” the report says.

baroness Altmann

The criticism comes as Baroness Ros Altmann, a former Tory pensions minister, has said she will move a fatal motion in the Lords next week , a drastic power rarely used, to block the government implementing it.

The report points out that winter fuel allowances will continue to be paid this year for people who quit the UK to live in an EU country before 2021. It is likely to be abolished after this year for people who moved to Switzerland, Norway, Liechtenstein and Iceland.

The government are trying to mitigate its effect on the poorest pensioners by encouraging the 880,000 who are entitled to pension credit, to claim. To do this they have to fill in a 243 question form and if they have over £10,000 savings -including money hidden in their homes – get a reduced form of pension credit. So far there has been a five per cent increase in uptake according to the DWP.

The Lords are scathing about this situation.”We are concerned that the Regulations may cause potential inequalities between low income pensioners claiming benefits and low income pensioners not claiming benefits, and it is not clear whether DWP has assessed this risk,” says the report.

The campaign to attract more pension credit claimants is causing admin problems for the DWP with the result that other people due to get pension credit are facing a nine week delay in getting the money, the report reveals. So the government are penalising the poorest as a result of the campaign.

The report also reveals that those on Universal Credit or who live abroad may need to make a claim
for the Winter Fuel Payment. The deadline for making a claim for 2024–25 is 31 March 2025, and claims can be made by post from 16 September 2024 or by phone from 10 October 2024.”

The report also highlights that all pensioners will be hit by the rise in energy prices and many more will start paying tax because of the freezing of personal tax allowances which will go on until 2028.

Keir Starmer and Rachel Reeves are both breaking traditional consultation and witholding information of the effect of the policy change from MPs and peers.

The report says: “All benefits regulations are required by law to be considered by the independent Social Security Advisory Committee (SSAC). This is generally done in advance of the legislation being laid. In this case, the Minister has opted for the urgency provision that allows SSAC consideration to be
retrospective. Since this might be perceived as bypassing SSAC scrutiny, we asked the DWP what, if any, effect an adverse report from that Committee would have after the Regulations have already come into effect. DWP responded that, in line with their legal duty, ministers would lay the report before Parliament, and should the report contain recommendations, lay a statement before Parliament alongside the report. It remains unclear what the practical impact of any statement might be on Regulations which
will have already come into effect.“

Compensation for Infected Blood victims

Peers in the same report have slammed the government regulations permitting compensation payment to infected blood victims, promised with great fanfare by ministers.

The committee’s report said: ” We found the Explanatory Memorandum (EM) to the Regulations overly
complex and technical, while lacking basic information about the policy such as how those infected can apply and from when, how long claims will take to be processed, when successful applicants can expect payments to be made, and the basis on which each claim will be assessed.”

The peers castigate the civil servants for not producing a report in simple, plain English and cast doubt on whether promises by the new government to start payment by Christmas will be fulfilled.

They also accuse the Cabinet Office of witholding information about the process.

“We are concerned that the Cabinet Office is withholding information on the impact and cost of
the Regulations until after the time for Parliamentary scrutiny has passed, which is unacceptable and circumvents proper scrutiny of the Regulations. We have not been given a reason why the costs could
not be published ahead of the budget. The House may wish to pursue the issue of costs further.”

The lesson from both the issues raised in this report is that this new government is not in control of Whitehall and allowing civil servants to evade proper scrutiny on the measures they are introducing. Either ministers are being inept in not following proper procedures or this is a deliberate decision not to provide MPs and peers with information allowing them to scrutinise the new government’s decisions.

Sir Keir Starmer says he is expecting to be the most unpopular Prime Minister of modern times. He is certainly knows how to go about it.

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Department for Work and Pensions postpones new nasty for poverty stricken pensioners until 2019

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Guy Opperman, pensions minster and MP for Hexham pic credit: guy opperman website

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The Department of Work and Pensions has put back harsh plans to change the rules for new claimants for pension credit from next June to sometime next year.

The decision not to implement savings that could lead to  tens of thousands of elderly people having to live on half the money paid out by pensioner credit is not motivated by a change of heart on a heartless measure.

It is because of incompetence and failure by the ministry itself to roll out another major benefit called universal credit – which replaces a whole series of benefits – on time. This was supposed to be nationwide by June this year. But the civil servants who planned it failed in their job – despite collecting bonuses worth £20,000 on top of six figure salaries for introducing the new benefit. You can read all about it in my blog last year here.

So now instead the benefit will not be rolled out across the country until the end of December 2018. The proposed timetable is here– and you can see which local area changes when.

Of course the department has not announced the delay to the new pension credit cuts until I contacted them to check the date. Rather like they forgot tell 3.9 million  women pensioners about the rise in the pension age until some 14 years later.

A spokesman told me:

“The timetable for the introduction of any policy changes will be determined by the roll out of universal credit – this change will not now be implemented this year.”

The measure as I reported earlier is particularly harsh if there is a big age difference between pensioner couples – with one say years younger than the other.

Previously the law said when the oldest person in a relationship reached pension age  they qualified for pension credit. Now it is being changed to the youngest person in the relationship reaching pension age. This means if there were a 10 year difference – the oldest person could get no pension credit payment until they were 76 – ten years after the raised retirement age. On person has told me of a 17 year difference – meaning one of them would wait until they were 83.

What is as shocking is the department’s disclosure to me on how the new system is planning to work. When it comes in they are proposing both people in a couple apply for universal credit when there is an age difference between the two- and only one is over 65. The change is devastating.

If you are on pension credit these are the rates (per week) for 2017 – 18 and the proposed rate for 2018-19

PENSION CREDIT
Standard minimum guarantee
single £159.35  rising to £163.00
couple £243.25   rising to £248.80
Additional amount for severe disability
single £62.45  rising to£64.30
couple (one qualifies) £62.45 rising to £64.30
couple (both qualify) £124.90 rising to  £28.60

But when you switch to Universal Credit these are the rates for 2018-19 per month:

Single claimant 25 and over £317.82
Joint claimants, either/both 25 and over £498.89

This means a couple instead of receiving £995.20 for 4 weeks would see their income halved to £498.89 a month until both of them were over, by then, 66.

Furthermore the younger person in the marriage will be subject to benefit sanctions if they fail to continually seek work. This would cut their benefit compared to pension credit by two thirds to just £313.82 a month.

Notice there are no new rates for universal credit for 2018-19 as the benefit is frozen unlike pensioner credit which rises in line with pensions. This in theory could mean the people deprived of pension credit could be forced to live on a frozen benefit for years and see their living standards fall every year.

The DWP is being generous enough to say they would not force a person over 65 to seek work and sanction them if they don’t succeed. Presumably even Mr Opperman, the pensions minister, would not want to be seen trying to force a 77 year old into a job while he or she waits for pension credit.

Frankly  this is an appalling situation and I hope Backto60 people take this up as well as demanding their pension and try and put pressure on MPs to tell the government not to go ahead next year. This is a real and sustained attack on the poorest pensioners in the country and ministers should be ashamed of thinking of implementing it.

 

 

 

Tories to implement new nasties for next generation of poverty stricken pensioners

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Guy Opperman, pensions minster and MP for Hexham pic credit: guy opperman website

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The attack on the 3.9 million 50s women who have lost their pension income is about to be stepped up again – with the poorest pensioners suffering a new round of misery  as a result of legislation passed by the coalition government in 2013.

The Mirror in a scoop last week by Dan Bloom has revealed that nearly one million women who could have claimed pension credit have been denied cold weather payments this year because of the rise in the pension age.

Pension credit is paid to the poorest people who can’t qualify for a pension and have less than £10,000 savings but it is linked to the pension age. It is also the passport to other benefits  – including cold weather payments. This year’s cold weather provoked by the Beast from the East has  meant more money has had to be paid out – but ministers have saved millions by raising the pension age.

According to the Mirror: There were 2.6 million eligible claimants on Pension Credit in 2010/11, the Commons Library figures show.

That fell to 2.4million in 2012/13, 2.1million in 2014/15, 1.9million in 2015/16, 1.8million in 2016/17 and 1.7million in 2017/18.

But there is worse in the pipeline. From this June a particularly nasty measure comes into force for new people claiming pension credit. Basically it means that if a woman falls for a younger man or a man falls for a younger woman – their entitlement to pension credit is forfeited when they reach the new higher pension age.

Previously the law said when the oldest person in a relationship reached pension age  they qualified for pension credit. Now it is being changed to the youngest person in the relationship reaching pension age. This means if there were a 10 year difference – the oldest person could get no pension credit payment until they were 76 – ten years after the raised retirement age.

The details are in this document here. House of Commons library Pension Credit – 2017 onwards. You can access it here.

The money involved is substantial :

Rates 2017/18

Standard minimum guarantee single £159.35 couple £243.

Additional amount for severe disability

single£62.45 couple (one qualifies) £62.45 couple (both qualify)£124.90

Additional amount for carers £34.95

But there  are also two other changes in the small print of pension changes coming into force. One involved a rather obscure named  Assessed Income Period (AIP)introduced by Labour in 2002 and 2008.

“The Labour Government’s intention, with the introduction of AIPs, was to make means-testing less intrusive for pensioners, by no longer requiring them to report changes of circumstance to the Pension Service on a weekly basis,” according to House of Commons library.

This meant the government only means tested people every five years and once pensioners reached 75 it stopped. At the time Tories and Liberal Democrats were worried that if people got worse off they wouldn’t get extra benefits.

Once both parties were in power they decided to abolish this – but not for that reason. The financial impact of such a change was shown in 2013 to benefit the government with  cuts worth £45m by making it law that pensioners lucky enough to get any extra income had to report it immediately so they could slash pension credit.

Another cut came into force in 2016. This reduced the period  people on pensioners credit could go abroad from 13 weeks to four – without having the benefit taken away. As  one of the comments from Buried News points out allowing people to spend a cold winter in warmer climes might help the elderly. But both the Tories and the Liberal Democrats at the time would have nothing of it.

The benefit is only claimed by 60 per cent of the people who are entitled to it. The House of Commons library report said: “Up to 1.4 million families who were entitled to receive Pension Credit did not claim it and up to £3.3 billion of available Pension Credit went unclaimed.”

Guy Opperman, the pensions minister, told Parliament:” We are committed to ensuring that older people receive the support they are entitled to and the Department targets activity on engaging with people who may be eligible at pivotal stages such as when they claim State Pension or report a change in their circumstances.”

He claimed the best way to help the elderly was to create “a web-based Pension Credit toolkit containing a range of resources for anyone working with pensioners.”

Somehow given his determination to slash the pension budget I suspect few people will believe he is really committed to that.