Christmas Bonus (Specified Sum) Order 2008

That the Grand Committee do report to the House that it has considered the Christmas Bonus (Specified Sum) Order 2008. This order is made under Sections 148 and 175 of the Social Security Contributions and Benefits Act 1992. Its purpose is to award a one-off payment of £60 to provide direct and swift financial support to vulnerable people in our society: real help, when and where it is needed most. We recognise that older people are concerned during the current economic downturn, and that is why this year we are spending approximately £900 million on additional Christmas bonus payments. This will put an extra £60 in pensioners’ pockets in addition to the regular £10 Christmas bonus received annually in December. This is equivalent to the largest possible amount someone could have gained if we had brought forward the uprating of the basic state pension from April to January 2009. Eligible recipients are those on various pensions, disability, care, industrial injury, war and bereavement benefits. This year’s Christmas bonus will be received by 15 million people, 12.5 million of whom are pensioners. We are determined to give pensioners more cash to help them through the winter and ease their worries about bills. This payment will go to all pensioners in receipt of state pension and pension credit, many of whom are on fixed incomes. Some 2.5 million others will also benefit from this one-off payment. The money will go to around 2 million disabled people, including 300,000 children, around 350,000 people who are carers and around 150,000 people in receipt of bereavement benefits. The Christmas bonus will be paid in two instalments. Recipients will still get £10 this month, as in previous years, with the additional £60 to be paid between January and March in the new year. The majority of state pensioners should receive the £60 payment in January 2009, in addition to their pension. The remaining 3 million customers will get their £60 in February or March 2009. In practice, that is the earliest we can make these payments, after seeking and obtaining the approval of the Committee and of the other place. The need to obtain both Houses’ approval also explains why the qualifying week for this year’s Christmas bonus has been moved, by an order subject to the negative procedure, from the first week in December to the week commencing 22 December 2008. Not only is this much-needed cash for those that need it most during challenging times; it is done via automatic payment, so that no-one need worry about how and where to claim. Importantly, this stand-alone payment is a tax-free lump sum that will not affect the recipient’s entitlement to income-related benefits that they may already receive. Those who argue that we should do nothing are wrong; I am sure the many people receiving this payment will agree. In these tough economic times, this one-off payment will provide genuine help to the UK’s most vulnerable people. As a valuable means of support for many who need it most during a time of increased financial pressure, it builds on a variety of other measures in the Chancellor’s Pre-Budget Report that were targeted to help the most vulnerable—including an increase in the full basic state pension from £90 to £95 a week, and the biggest increase in pension credit since it was introduced, so that no pensioner need live on less than £130 a week from April 2009. Those increases add to the significant measures already in place to help pensioners, such as an increase in the winter fuel payment and an extra £50 for households with those aged 60 or over, or £100 for households with people aged 80 or over. It makes the claims process for these measures simpler and easier, as through one phone call you can now claim pension credit, housing benefit, council tax benefit and state pension. There is also free off-peak bus travel, free eye tests, free TV licences and, from April 2009, free swimming. The Government have recognised a need to help those on the lowest incomes now and, as I have outlined, we are introducing this one-off payment to help address that issue. I commend it to the Committee.