Pensions and Social Security

Michael Ellis Excerpts

Wednesday 13th February 2013 Commons Chamber

[Steve Webb]

The hon. Gentleman is right that non-take-up of pension credit has been a persistent problem. Over the past year or so we tried a pilot scheme in which we took a sample of people we thought, based on our records, might be entitled and put the money in their bank account. We then wrote to them to say, “We’ve put some money in your bank account. Would you like to claim pension credit?” The experiment failed. Incredibly, people did not claim it, or decided that they did not want or need it, or thought that they were not eligible. Even putting money into people’s bank accounts, based on our records, did not succeed. However, I have some good news for the hon. Gentleman. As a consequence of the universal credit reforms, whereby housing benefit for working-age people will be merged with universal credit, we will be merging housing benefit for pensioners with the pension credit.

The reason that is relevant to the hon. Gentleman’s question is that we know that some people claim their housing benefit and not their pension credit, and that some claim their pension credit and not their housing benefit, but when we combine the two in a single payment each group will claim both and we anticipate several hundred million pounds of extra benefit expenditure to low-income pensioners as a result. I think that that will be the most tangible thing that any Government have done in many years.

[Michael Ellis (Northampton North) (Con)]

Will the Minister confirm that that will also save administrative costs to the state, because we want as much saved in such costs as possible?

[Steve Webb]

My hon. Friend is right that placing the housing element in a single benefit—the pension credit—rather than it being a separate claim through a local authority will reduce administrative costs and increase take-up as well.

On disability benefits, this year the coalition will ensure that those who face additional costs because of their disability and who have perhaps less opportunity to increase their income through paid employment will see their benefits increased by the full value of CPI. Therefore, disability living allowance, attendance allowance, carers allowance and the main rate of incapacity benefit will all rise by the statutory minimum of 2.2% from April 2013, as will the employment and support allowance support group component and those disability-related premiums paid with pension credit and with working-age benefits.