HC Deb 04 December 1967 vol 755 cc930-1
18. Sir J. Langford-Holt

asked the Minister of Social Security whether she is aware that on page 5 of the new guide to supplementary pensions for people under pensionable age it is stated that for supplementary pension purposes capital of £2,000 is assumed to produce an income of £7 per week; and how this figure is calculated.

Mr. Loughlin

Yes, Sir. Under the Act capital over £800 is treated as equivalent to a weekly income of 2s. 6d. for each complete £25. This is higher than the actual income which the capital would produce, because it is right, in a scheme of supplementary benefits, to assume that people with substantial sums of capital should draw on them to some extent for day-to-day living expenses.

Sir J. Langford-Holt

When those needs are prolonged, to what extent are these people intended by the Minister's policy to draw on these reserves?

Mr. Loughlin

Provided that recipients of supplementary benefit have no other source of income, they can have up to £2,000 and still be entitled to supplementary benefits. Under the old National Assistance scheme the capital allowed was £600. There has been a substantial improvement in that respect since we came to power.

Mr. Rankin

Can my hon. Friend tell me where £2,000 could be invested to produce an income of £7 a week?

Mr. Loughlin

My hon. Friend evidently misheard the Answer to the Question. What I said to the hon. Member for Shrewsbury (Sir J. Langford-Holt) was that we did not expect them to get an income out of interest on that basis but that they were expected to use some of their capital for day-to-day living purposes.