HC Deb 16 December 1980 vol 996 cc134-5
9. Mr. Rooker

asked the Secretary of State for Social Services what is his estimate of the number of retirement pensioners who have ceased to draw supplementary pension since the change in capital limits operative from 24 November.

The Under-Secretary of State for Health and Social Security (Mrs. Lynda Chalker)

Actual figures of the number of pensioners ceasing to draw supplementary pension on account of the new capital rule are not yet available, but on the basis of November 1979 information it is expected that 6,000 supplementary pensioners will have lost title to benefit.

Mr. Rooker

Is the hon. Lady still happy that the capital limit now includes the surrender value of insurance policies? What action has been taken since the promise of 10 October to the Tory conference that this harsh and unfair rule would be investigated?

Mrs. Chalker

Only beneficiaries with life policies with a surrender value of more than £2,000 will have to encash them. There are no statistical details yet available, but I understand that few beneficiaries have policies with surrender values exceeding £2,000. If people wish to spend their capital so as to obtain supplementary benefit, that must largely be a matter for them. I am guided by the resources regulations. The interpretation of the regulations is for the independent adjudicating authorities. I said in October that the matter would be considered. It must be remembered that we are not changing anything. The former Supplementary Benefits Commission used a practice similar to that embodied in regulation 6(1)(c).

Mr. Bowden

Does my hon. Friend agree that it is unsatisfactory that up to half a million pensioners who could receive a supplementary pension do not do so? Will she instigate yet a further campaign to try to bring in these people and ensure that they receive their rights?

Mrs. Chalker

I sympathise fully with what my hon. Friend has said. When considering the future computerisation of the Department, we hope that it will be possible for those with an entitlement to supplementary benefit but who do not now claim it automatically to be brought in.

Mr. Andrew F. Bennett

Will the hon. Lady confirm that if two elderly pensioners who are both in receipt of supplementary benefit and with savings of slightly more than £1,000 each get married, they will lose their entitlement to supplementary benefit because their savings when aggregated will be over £2,000?

Mrs. Chalker

The hon. Gentleman is right to say that two persons married or living together, each with savings in excess of £1,000, would have those savings aggregated as an assessment unit in the calculation of the capital cut-off point. It has happened before that persons with savings slightly over the limit spend that money in the course of natural spending and quickly become entitled to supplementary benefit. That is reasonable, but it is important that people should not abuse the system. In trying to make the system simpler, we need to have a single cut-off point.