HL Deb 21 March 1978 vol 389 cc1719-24

4.28 p.m.

Lord WELLS-PESTELL rose to move, That the draft Social Security Pensions (Home Responsibilities and Miscellaneous Amendments) Regulations 1978, laid before the House on 28th February, be approved. The noble Lord said: My Lords, the regulations which I am asking your Lordships to approve prescribe the categories of persons who are to have their pension rights protected under Section 19 of the Social Security Pensions Act 1975. As your Lordships may know, Section 19 of the Act enables people for the first time to have their pension rights protected in respect of years during which they are prevented from working because of responsibilities at home.

Let me say first that the broad intention of the home responsibilities provision is to protect a person's pension record over substantial periods of home responsibilities. It is not intended to cater for short periods; for example, a few weeks or a few months. The regulations will therefore apply to complete tax years during which a person satisfies conditions in the regulations.

We are prescribing broad categories of people who can be readily identified and whose circumstances are such that, if they stay at home rather than go to work, it would generally be accepted as reasonable that they should not on that account be penalised by a reduction of the basic pension which they earned when they were able to work. The first category of persons to be covered are people who are bringing up a family. The regulations will allow protection for any complete tax year for which a person has been the main payee for child benefit for a child under the age of 16.

Protection will depend entirely on receipt of child benefit and will be available regardless of whether a person does manage to do some work during the year. However, a married woman or widow, who has retained the right to pay reduced rate National Insurance contributions, will be excluded from the provisions until she decides to have full contribution liability again. Recipients of child benefit will represent over 90 per cent. of the people who will be able to benefit from the new home responsibilities provisions. A woman will, for example, be able to spend as long as 20 years at home bringing up her family, and still qualify for a full basic pension, provided she has 20 years' contributions or credits during the time when she did not have any home responsibilities.

The second category of persons to be covered are people looking after severely disabled persons; that is, those entitled to attendance allowance or constant attendance allowance. This will protect the pension rights of those very deserving women, and in some cases men, who are not already receiving an invalid care allowance (to which a credit entitlement is already at present attached). The regulations require that a person must have been caring regularly throughout the year for at least 35 hours a week, which is the same number of hours as that required in relation to invalid care allowance. The word "regularly" will allow the Secretary of State to disregard short breaks in caring; for example, during a short spell in hospital. The provisions will not be limited to relatives. People who are eligible under this category will need to apply for protection because, while the Department already has details of the person needing attendance, insufficient details are held about the care, the person who is in attendance. We will ensure that everything possible will be done to publicise this in the Department's leaflets and communications with contributors.

The third and final category of persons are those who are in receipt of supplementary benefit and who, because they are looking after an elderly and incapacitated person, have been excused the requirement to register for employment as a condition for receiving supplementary benefit. These are cases where the Supplementary Benefits Commission is at present helping to protect the pension rights by including the cost of a Class 3 voluntary contribution in the assessment made. With the introduction of home responsibilities protection, it will become more appropriate and administratively easier to protect the pension rights of these people in this new and different way. As with the child benefit recipients, this particular protection will be available automatically without application, since the Department already has the necessary details. I do not think there is any need for me to say anything more. This is a very valuable measure; it is also a simple measure. I commend the regulations to your Lordships, and I hope that you will adopt them. I beg to move.

Moved, That the draft Social Security Pensions (Home Responsibilities and Miscellaneous Amendments) Regulations 1978, laid before the House on 28th February, be approved.—(Lord Wells-Pestell.)

4.35 p.m.

Lord SANDYS

My Lords, the House will be grateful to the noble Lord, Lord Wells-Pestell, for explaining the regulations. He told your Lordships that he considered them to be simple. I think we will grant to the noble Lord that they are in themselves simple, but when they are added to the full weight of complication they will need very careful explanation, and I was glad to hear the noble Lord refer to the publicity his Department is to give. I believe that there are problems here, particularly relating to eligibility. The order says, on page 2, that a person shall … be precluded from regular employment by responsibilities at home, within the meaning of these regulations …". It goes on to cite particular circumstances. I think that the problem with which a number of people will be concerned is that of the situation regarding married women. Your Lordships will be aware that, of married women who are in employment, over 75 per cent. pay the reduced rate of contribution, 2 per cent. This would disentitle them automatically to eligibility. The noble Lord in effect said this in what he has told your Lordships. So what a married woman must do to make herself eligible, if she is paying the reduced rate of contributions, is to go over to the full contribution of 5.75 per cent.

She may have forgotten to tell her local social security office of this fact. It would be helpful if the noble Lord, in replying, can say that this point has been noted by the Department. Perhaps a little leaflet, or a slip of paper, could be included with publicity material to make sure that someone who is claiming the first child benefit, in a situation of this kind, could have a reminder. That is the only point I wish to mention. I am grateful to the noble Lord for giving the details of these regulations.

4.37 p.m.

Lord BANKS

My Lords, I, too, should like to thank the noble Lord, Lord Wells-Pestell, for the very clear explanation he gave us of the main import of the regulations. The regulations are not controversial, but there are two points I should like to raise. As the noble Lord explained to us, the regulations define the expression, precluded from regular employment by responsibilities at home"; and anyone is so precluded if he satisfies any one of a number of stated conditions. As the noble Lord made clear, in some instances it is necessary for the individual to apply and in other instances it is not necessary; protection is automatic.

We read at the bottom of page 2 of the order, in paragraph (4)(b), that preclusion shall not apply in relation to any year if the person in question does not furnish such information relevant to the question whether in that year he was, within the meaning of these regulations, precluded from regular employment by responsibilities at home as the Secretary of State may from time to time require". Would the noble Lord not agree that it will necessitate some intensive publicity to see that people who are entitled to apply in fact realise that they must apply, and to ensure that they apply in time. For example, people looking after someone who is receiving an attendance allowance, or a constant attendance allowance, to which the noble Lord referred, are involved in this, and it is important that these people should know that if they wish to receive this protection they must apply.

Secondly, receipt of child benefit is one of the conditions which entitles an individual to this protection. A husband may have the child benefit paid to him if he secures his wife's written consent; but let us suppose that his wife, when she was in work, was paying reduced contributions. Receipt of child benefit would not entitle her to home responsibilities protection. So she transfers the payment of the child benefit to her husband; she gives her written consent. He subsequently becomes unemployed, and goes on unemployment benefit, and possibly eventually on to supplementary benefit. Am I right in thinking that he would, while in receipt of unemployment benefit and supplementary benefit, receive home responsibilities protection so far as his pension contributions are concerned, as the recipient of child benefits, although, in fact, his wife was at home looking after the child!—he was not the person looking after the child. Had the child benefit not been transferred to him, neither parent would have had their pension contributions protected. Am I right in thinking that that is the position? If I am right, is there an anomaly? I raise these two points; but, in general terms, we on these Benches are certainly content that the House should approve these regulations.

Lord WELLS-PESTELL

My Lords, I am obliged to both noble Lords for their comments and observations. The noble Lord, Lord Sandys, raised the question of women who may want to go to work. As I understand the situation, a woman who is staying at home looking after the children, because she is entitled to child benefit for one or more children is, as I said earlier, protected because of her home responsibilities; but that means she is not going to benefit in the same way as a married woman working, because she will not get, for example, an earnings-related pension for the particular year or years.

I said when introducing this regulation that we recognise that a good many of the women will want to go out to work. If their income is over £910 per annum (which is £17.50 a week for the 52 weeks) then, as I understand the situation, they will be liable for National Insurance contributions, including an earnings-related amount. This will be stored to the woman's credit when the time comes for her to apply for a pension in her own right. In that sense, she will be better off—and it depends on how much she earns whether she will be considerably better off—than the wife who has stayed at home. While the wife who stays at home may be at a disadvantage in the final amount of basic pension, the fact is—and this is the all-important consideration: that many of them will want to stay at home and look after their children and discharge their home responsibilities—nevertheless, for every year they stay at home it will count towards their pension.

I think the question was raised about the married woman or widow who at present has reduced liability for contributions. She must notify her local security officer on or before 6th April this year if she wants to be fully covered by the new scheme. Any such woman who is not at present working and does not intend to go back to work until after, say, 6th April 1980 should make her choice now. She ought to make her choice now covering the next two years; because if she notifies after 6th April it can only take place from 6th April of the following year. It does not take effect immediately. If she makes a note of it or gives notice of that in June or July, it does not take effect until 5th April of the following year. Anyone who wishes to go back to work after the present period ought to notify her intention by 6th April this year; otherwise she may lose some benefit from these provisions.

A married woman or widow who has a reduced contribution liability will automatically lose that right if she has two consecutive tax years after the 6th April this year during which she has not been to work. Regulation 24B, the requirement to supply information, applies only to the second category of cases. May I say that we in the Department are concerned—and noble Lords will accept from me there has been a good deal of discussion of the matter—about how one can reach people. There is always the problem with benefits of how to reach people; how to ensure that they know their rights and that they know how to take them up. Everything possible is being done to publicise the need for a woman to make clear her choice.

A person who is unemployed will usually be entitled to have contributions credited to him because he is unemployed; any such credit will override the need for home responsibilities protection. I hope the noble Lord, Lord Banks, feels that that is an adequate answer to his question. I think that it is. I think I have answered whatever questions have been put to me. If I have not made those answers clear, I hope that this will be drawn to my attention so that I may have the opportunity of clarification, if necessary by correspondence.

On Question, Motion agreed to.