IMPROVED STATE PENSION RIGHTS WHEN SPOUSE ENTERS RESIDENTIAL CARE (Hansard, 5 July 1995)

§ Sir Andrew Bowden

I beg to move, That the clause be read a Second time.

The object of the new clause is to give the same state pension rights to a woman whose husband enters long-term care as to a woman whose husband has died, or from whom she has divorced. It will give women who have separated from their husbands who then go into permanent—I stress permanent—residential care parallel rights to women who are divorced and widowed.

People who are divorced or widowed can use their former spouse's contribution record up and until the end of the marriage to gain a basic state pension or to increase a partial pension. The new clause would particularly benefit older married women receiving the married women's category B pension of £35.25 per week. When the partner goes into care, a category A state pension of up to a maximum of £58.85 a week will be the substitute for the married women's pension.

The new clause introduces parallel changes to state pensions. It will give a spouse who is separated from his or her partner entering long-term care similar rights to those of people who are divorced or widowed. I shall read to the House a specific case that has been brought to my 440 attention. It is not from one of my constituents, and, of course, I do not intend to give the name, but I can assure colleagues that it is a perfectly genuine case.

In the letter, the lady writes: I am 69 years of age. I worked to make ends meet as my husband has not been well. I worked till I was 65 and then had my husband to look after. We manage on our pension, as I have never asked for help in my life and never owed a penny anywhere. The last two years were just awful and the last 12 months my husband has Alzheimer's disease, which is bad enough to watch happening. I had a slight heart attack on 5th March, was taken to hospital and my husband was put into a home. The doctor advised me he must stay there as he won't get any better. I was told to send my pension book in so I could get more money. My pension is £35.60p, but I had the book back saying that that is all I can get. How can I live on that? Now the little I have saved will have to go to keep myself. I don't want any help, but my pension surely should have been £57 old-age pension, but they told me I am classed as single and my husband is still alive. To go in and see him and come out as I do is so upsetting and now the worry of the pension. Life just not seems worth living. Please can you help? That represents a very sad situation indeed. I am aware that this matter was discussed in Committee, and, of course, I know the arguments that were used by my hon. Friend the Under-Secretary of State, who said: the spouse at home would benefit only if the pension they received was sufficiently substantial to lift them entirely above the level of income-related benefit they received."—[Official Report, Standing Committee D, 27 June 1995; c. 890.] I do not think that that gives the full picture. As I understand it, the full state pension is £58.85. The applicable amount for income support for a single pensioner aged between 60 and 74 is £65.10, so a woman benefiting from my new clause and with no other income would still get income support of £6.25 in addition to her enhanced pension. The applicable amount for a pensioner aged between 75 and 79 is £67.20, and for a pensioner aged 80 or over it is £71.65.

I shall at this point remind the House and emphasise to my hon. Friends on the Government Front Bench that pensioners do not like taking income support; they will avoid it whenever they can. The new clause would help considerably in that regard.

I shall not detain the House any longer. I hope that my hon. Friend will look at the new clause again.

§ Mr. Arbuthnot

The new clause attempts to extend the existing substitution rules in a way that I believe would distort the intention behind those rules. The substitution provisions are aimed at cases in which a marriage has ended. The rules recognise that in such cases a woman needs to be compensated for a particular change of circumstances—the unforeseen ending of a marriage in which she had previously relied on her husband's record for an income in retirement.

In such circumstances, substitution gives women a record on which they can build with their own contributions following a divorce. The married woman's 60 per cent. pension could almost be described as a good buy, because it is achieved without the payment of any extra contributions. Ours is the only country in the European Union to provide such a pension. The new clause would give women in that position a 100 per cent. pension, again without any contribution.

441 An amendment similar to the new clause was discussed in another place, and we had a full discussion on the whole residential care issue in Committee. As both my noble Friend Lord Mackay of Ardbrecknish and I said in our separate debates, the Government sympathise with the concerns felt in both Houses about people in such circumstances, and—as I have said many times in Committee—we are a listening Government. Both my right hon. Friend the Secretary of State for Social Security and my right hon. Friend the Secretary of State for Health have taken action: the local authority charging regulations will be amended so that spouses can keep their partners' occupational pension when those partners enter residential accommodation. That will extend to income support preserved rights cases. The change will benefit many people, and I am sure that my hon. Friend the Member for Brighton, Kemptown (Sir A. Bowden) will welcome it as far as it goes.

My hon. Friend, however, has pressed us to go further, and to amend the legislation relating to the basic state pension. I cannot agree that that is necessary. It would not benefit everyone concerned, especially in cases in which the remaining spouse receives an income-related benefit—usually, income support. All income-related benefits must take pensions fully into account, and in such cases spouses at home would benefit only if the amount of pension that they received was large enough to take them entirely above the level of income-related benefit that they received. In the majority of cases it would simply be a bureaucratic accounting exercise, recycling state spending from one benefit to another. An adequate safety net already exists: that is the point that I wish to make in regard to the example given by my hon. Friend.

My hon. Friend suggested—rightly, in my view—that older people preferred to receive contributory benefits rather than means-tested benefits. I understand that preference, but I do not consider it sufficient reason to extend contributory benefit provision to this or any other group. That would impose an automatic and unwarranted extra charge on public expenditure. After all, spouses at home may have considerable resources of their own. I do not believe that automatically granting extra state pension to people in such circumstances would be an appropriate use of public funds.

I hope that, having listened to my argument, my hon. Friend will not feel it necessary to press his new clause.