Welfare Reform Bill

My Lords, I shall briefly explain what the existing rules are for young people. Special conditions for young people who are exempt from meeting the usual PAYE national insurance conditions are set out in paragraph 4 to Schedule 1 to the Welfare Reform Act 2007. These provide that a person aged 16 to 19, or 20 to 25 in certain prescribed circumstances, who is not in full-time education and has had a limited capability for work for 196 consecutive days, will be entitled to contributory ESA. No other age group can qualify for contributory ESA without having paid or being treated as having paid national insurance contributions. Nor does any other contributory benefit have similar arrangements. The vast majority of claimants who presently receive contributory ESA on the grounds of youth—around 90 per cent—are expected to receive income-related ESA. Those who do not qualify for income-related ESA are likely to have capital in excess of £16,000 or a partner in full-time work who may be entitled to working tax credit. Clause 52 removes these special rules. Amendment 76ZA seeks to retain these measures. It would retain the provision for people who are in the support group who have limited capability for work-related activity. The amendment extends further than the existing provisions in that it extends the youth provisions to claimants in full-time education and to more persons living outside Great Britain by the removal of the residence and presence rules. We do not think it is right that people who do not have a recent link to Great Britain should be eligible for our benefits. We want to ensure equal treatment for all groups when establishing entitlement to contributory benefit. We believe our proposals have built-in support for this group of claimants. The vast majority of this group, around 90 per cent, are expected to receive income-related ESA. The amendment would add complexity to the benefit system because it would allow full-time students in this group to be entitled to ESA. It is not intended to be paid to students in full-time education. Income-related ESA is made available because of entitlement to DLA. This is because we do not want the benefits system to support students. We believe that linking eligibility to DLA enables those with continuing conditions to receive additional financial support. This provision will continue. Importantly, this amendment would add complexity by exempting this group from our well established rules on residence and presence in Great Britain. The amendment would also disadvantage ESA youth claimants by requiring limited capability for work-related activity to be demonstrated before someone was entitled to ESA on grounds of youth. Under this amendment, we would not be able to pay ESA until the WCA had been carried out. I pick up the point from the noble Baroness, Lady Lister, on passported benefits. One of the positive consequences of the abolition of the ESA youth provision is that young people who qualify for income-related ESA instead will automatically qualify for passported benefits such as free NHS prescription charges, rather than having to claim such help separately. As the noble Baroness mentioned, we have asked the Social Security Advisory Committee to let us have a report about the eligibility for passported benefits, and we have not yet received that report. It would therefore be somewhat premature at this stage for me to say precisely what the future arrangements for passporting would be under the universal credit. If this amendment was accepted it would reduce the expected cumulative benefit savings by around £10 million by 2015-16. I ask the noble Baroness to withdraw her amendment.