Welfare Reform Bill

I thank noble Lords for the amendments and the chance to explain the Government’s position. One of the amendments removes the provision to abolish new awards of the adult dependency increase with carer’s allowance from 6 April 2010, and to phase out existing awards by 5 April 2020. The other removes the provision to specify an end-date to awards of adult dependency increases with carer’s allowance. The noble Baroness, Lady Thomas, and the noble Lord, Lord Skelmersdale, broadly got right the history of adult dependency increases and where the Government are on the subject. I say straight away to my noble friend Lady Turner that the clause does not mean that carers can access only means-tested benefit. As I shall explain, it removes one component of the existing structure of allowances available to carers. By way of background, it might help if I explained that our intention to introduce the change was announced in the December 2006 Pre-Budget Report. The Committee will be aware that one of the long-standing aims of my department is to simplify and update the benefits system. Reducing complexity means that people claiming benefits can better understand what support is available and so improve the take-up of benefits. Simplifying the benefit rules also helps to ensure that staff administering those benefits make accurate and prompt payments. We have already legislated to phase out adult dependency increases with state pension between 2010 and 2020. Such increases have never been a feature of jobseeker’s allowance, nor are they a feature of the new employment and support allowance, which replaced incapacity benefit for new claims from last October. I shall address Amendment 124. Removal of the increases from carer’s allowance and maternity allowance is the final measure needed to complete that element of benefit simplification and modernisation. We also think that the benefit system should reflect modern society. The concept of adult dependency is becoming increasingly outdated in a society in which partners generally regard themselves as equals rather than as breadwinner and dependant. Around 3,000 awards of carer’s allowance a year include an adult dependency increase, and 18,000 carer’s allowance awards are in payment, which is about 4 per cent of the total of all awards which include the adult dependency increase. Half the carers who receive the increase are no better off because it reduces the income-related benefit payable to them. The relatively small figures are indicative of the fact that the adult dependency increase is outdated. It is important to bear in mind, as both the noble Baroness, Lady Thomas, and the noble Lord, Lord Skelmersdale, did, that this change has a 10-year transition period. Although no new awards will be made from April 2010, we will not end existing awards until April 2020 for any customers who continue to meet the conditions of entitlement. The average length of awards is six years and, as a result, entitlement will have ended by 2020 anyway for the vast majority of customers. Turning specifically to Amendment 125, we are confident that very few people will still be receiving an adult dependency increase in April 2020. However, we will consider how best to notify customers in good time—I say that in response to the noble Lord, Lord Skelmersdale—and we have a period in which to do that. We need to make it clear to them that the increase is being withdrawn and to advise them to claim any alternative benefits to which they may be entitled. Less well-off carers and carer households are likely to be in receipt of income-related benefits and therefore will be fully compensated by increases in those benefits. The noble Baroness, Lady Thomas, asked if I could give an assurance that no one would be worse off. I cannot give that assurance; one cannot say that, come 2020, there will not be someone in receipt of the adult dependency increase. However, the number of people in that position will be very few, in our estimate, because of the six-year average of the claim. A proportion of those claimants receive income-related benefits and therefore it is a net nil for them. The strategy to ensure that individuals are informed over the 10-year transition period has yet to be worked through but, as I said, we have time enough to do that.