Welfare Reform Bill

I thank the noble Baroness for raising an important issue with her amendment. Income-related benefits are important to our customers, not only because of the income they provide, but also, as she pointed out, because they often act as a passport to entitlement to other benefits. We expect the income-related strand of employment and support allowance to offer access to the same benefits that have already been discussed as income support currently does. The range of support includes, as the noble Lord, Lord Skelmersdale, pointed out, free prescriptions and remission from other NHS charges, but also includes other benefits such as free school meals and smaller, yet important, schemes such as school uniform grants. Additionally, customers of the income-related strand of ESA will be passported on to full housing benefit and council tax benefit, which, as noble Lords know, can make a huge difference to families’ income. We do not currently provide an automatic passport for someone who only receives contributory benefit. That is because entitlement to contributory benefits is not usually based on a person’s level of income—and the schemes we are talking about today are targeted support, meant for those most in need. If someone has a low income, and is receiving incapacity benefit, or, in the future, the contribution-based strand of ESA, they may qualify for help with free NHS prescriptions and help towards other NHS charges through the low income scheme. There is a difficult balance to be struck. The noble Baroness pointed out that there is a fair amount of form-filling and inconvenience for our customers, and spoke of the risk that some may lose out on entitlements which are rightfully theirs. The current system is designed to identify what other income people have so help can go where it is needed most. The challenge is to find a way of identifying those who are on low income, whether they receive contributory or income-related benefit, without the need for all the forms and processes, and ensuring that the information that we have is up to date as people’s circumstances change, without our being overly bureaucratic or intrusive. As has already been commented on, the Government’s response to the Health Committee’s report on NHS charges gave an undertaking to explore the possibilities of access to free prescriptions without the need to make a separate low income scheme claim. This will be looked at as part of the overall review of prescription charges. The Government will report the outcome of this review by this summer. Additionally, to make it easier for customers to meet the cost of an annual payment certificate, I am pleased to say that the Government have already agreed to make available the option of payment through monthly direct debits from July 2007. This has been debated for many years and many organisations have campaigned for it. At the same time, four-month prepayment certificates will be replaced by lower-cost three-month prepayment certificates. I stress the difference between the income-related and contributory ESA. For a person to receive income-related ESA, an income assessment is made of them. For contributory ESA, no income assessment of that person will have been made. They could be very wealthy and receive ESA on a contributory basis. That is the rationale for a requirement being placed on them to fulfil a low-income test to get free prescriptions.