Welfare Reform Bill

Perhaps I may start by reiterating what the Government have done on pension credit. When we came to office in 1997, because of the decoupling of the basic state pension from the earnings link, a huge raft of pensioners were in real poverty. Pension credit was an early act of this Government to seek to make sure that resources were channelled at the poorest. Indeed, that has helped significantly in taking hundreds of thousands of pensioners out of poverty. But the take-up is still not as high as we would wish. We believe that between 61 per cent and 70 per cent of pensioners who are entitled receive pension credit, although the take-up of the guaranteed credit, which is paid to the poorest pensioners, is between 72 per cent and 81 per cent. Notwithstanding the provisions in the clause, which I shall come to in a moment in responding to the amendment, we are committed to ensuring that pensioners receive the support to which they are entitled. That is why we have simplified the claims process; you can now get housing benefit, council tax benefit and pension credit via one phone call and multiple claims are not necessary. A new take-up campaign was launched in early 2009 and will be rolled out across 20 regions where there are a high number of eligible non-recipients of pension credit. During May of this year, the DWP wrote to 230 pension credit recipients to encourage them to contact their local council to check whether they are entitled to council tax benefit and housing benefit. So we are looking to improve the take-up of these benefits on a joined-up basis. In addition, we are conducting around 13,000 home visits a week to vulnerable customers to ensure that they are receiving all benefits and services to which they are entitled. We currently have joint working partnerships, live or at the implementation stage, with all 203 primary-tier local authorities in England, Scotland and Wales. These partnerships enable the Pensions, Disability and Carers Service, local authorities and the voluntary sector to provide a single point of access to social care and benefit entitlement. Pension credit has been highly successful since its introduction in 2003. The number of pensioners with relatively low income has reduced by around 500,000 but it is becoming increasingly difficult, notwithstanding the action that we have taken, to reach those people we believe may be entitled to pension credit but who, for a variety of reasons, are not claiming it. As part of the Government’s ongoing commitment to help people to get the support to which they are entitled, we are looking for new ways of encouraging such people to take up what help is rightfully theirs. The powers in Clause 23 will help us to do this by paving the way to exploring the potential for making better use of the information that government already hold to ensure that we maximise the number of older people who get the help to which they are entitled. I understand that there is considerable and understandable interest in how the piloted powers in Clause 23 will be used. However, I hope noble Lords will indulge me with a little patience as the structure and design of the pilot has not yet been finalised. However, we are keen to ensure that the pilot is designed in such a way as to provide a robust body of evidence about the prospects for making better use of the information available to us in order to improve take-up of pension credit. The pilot will also provide evidence for an informed debate on whether we should seek new or better data sources, or simplify the benefit rules so that the claims process can be streamlined in the longer term. In designing the pilot, it will clearly be important both that we work closely with our external stakeholders and that we subject the design to close analytical scrutiny to ensure that the pilot design and evaluation methodology is appropriate and robust. Until we have gone through that exacting process, I hope that noble Lords will understand that I cannot be too forthcoming in the detail of the design of the pilot scheme. That said, we plan to have the necessary regulations in place detailing how the pilot will operate by the end of this year, with a view to running the pilot no earlier than April 2010. While on the subject of regulations, I should say that they will be made using the affirmative procedures, so that both noble Lords and Members of the other place have the opportunity to debate them. With regard to the duration of the pilot, which was the focus of the noble Lord’s amendments, it may well be that it runs for only a relatively limited period of, say, three months, and so the 12-month period will allow us adequate time to do what we need to do. We are currently working on the detailed design of the pilot programme in conjunction with colleagues in government and the voluntary sector. In designing the pilot, we are looking at how best to evaluate the logistics of running an automatic payment system, the quality of administrative data used to make such awards and participants’ reactions to receiving an automatic payment. It is also right that we are carrying out qualitative research both with people who have gone on to claim pension credit at the end of the trial payment and with those who do not to find out about experiences of and attitudes toward the automatic payment itself and the reasons for subsequently claiming or not claiming. As I said, we anticipate having the necessary legislative framework in place by the end of this year. We are considering making estimated awards of pension credit for a limited period of around three months to a sample group of about 2,000 pensioners, based on the information that we already have and without the need for a claim. I think that that issue differentiates this pilot from the generality of pilots where we are testing new approaches. We are dealing with information that we already have in the system and looking at a fairly concentrated approach to automatic payment of pension credit, using the data that we already have. I hope that that explains our position clearly to the noble Lord.