HL Deb 10 March 1982 vol 428 cc204-11

3.12 p.m.

Lord Denham

My Lords, my right honourable friend the Secretary of State for Social Services will be making a Statement in another place this afternoon on social security benefits. In view of the length of the list of speakers for the debate this afternoon, and the length and complexity of the Statement, it has been agreed through the usual channels that, with the leave of the House. I should on this occasion arrange for the Statement to be made to your Lordships' House by inclusion in the Official Report. I will also arrange for copies to be available in the Library.

Following is the Statement referred to above: I with permission, Mr. Speaker, make a Statement required by the Social Security Act 1975 about the annual up-rating of social security benefits which will come into operation in the week beginning 22nd November. For the convenience of the House a detailed schedule of the new rates of benefits, which forms part of this Statement, has been placed in the Vote Office and will be included in the Official Report. The new rates reflect the estimate that the general level of prices will increase by 9 per cent. between November 1981 and November 1982. Benefits generally will be uprated in line with that forecast and in addition the 2 per cent. shortfall at the 1981 uprating will be made good—not only for pensions and other related long-term benefits, as we had already promised, but also for all other weekly benefits. This gives a total increase for most benefits of 11 per cent. Turning, first, to the uprating of national insurance benefits the standard rate of basic retirement pension for a single person will go up by £3.25 a week from £29.60 to £32.85. The rate for a married couple will go up by £5.20 from £47.35 to £52.55. The standard rate of sickness benefit and unemployment benefit will go up by £2.50 for a single person from £22.50 to £25.00, and by £4.5 from £36.40 to £40.45 for a married couple. The same percentage increase of 11 per cent. will apply to the earnings-related additional component to national insurance pensions; to pensions payable under the old graduated pension scheme; to those who receive guaranteed minimum pensions from contracted-out occupational pension schemes; and to public service pensions. It will also apply to all other weekly national insurance benefits, including industrial injuries benefits, and to war pensions. Child benefit will also be increased by over 11 per cent. from £5.25 to £5.85, an increase of 60p per qualifying child. One-parent benefit will go up by the same percentage from £3.30 a week to £3.65. So a one-parent family with two children not in receipt of any other social security benefits will find the amount paid for the children rising from £13.80 a week to 15.35. After taking the increases in child benefit into account, as has been the practice in previous years, the dependency additions for children paid with short-term national insurance benefits will he 30p a child, compared with 80p at present. The child dependency additions payable with retirement, widow's or invalidity pensions will increase from £7.70 a child to £7.95. Family income supplement is payable to people in work where tile family's gross income. apart from child benefit and one-parent benefit, falls short of a prescribed level. The prescribed level of income for family income supplement will go up by £8.50 to £82.50 weekly for one-child families and the additional amount for each further child will he raised from £8.00 to £9.00 a week. The maximum payment for a one-child family will rise from £18.50 to £21.00 a week, and the addition for each further child will go up by 50p to £2.00. This means that the increases will be particularly helpful to larger families with the lowest incomes. I turn now to supplementary benefit. As the House will be aware from the proceedings last week in the Committee stage of the Social Security and Housing Benefits Bill, we propose to increase the scale rates of supplementary benefit from next November in line with the forecast increases in the general level of prices, after excluding housing costs. This is because both under the present scheme, and when housing benefit is introduced, the housing costs of supplementary benefit claimants are met separately. Supplementary benefit is different in this respect from all other benefits. The treatment of housing costs distinguishes those costs from all other day-to-day living expenses that are covered by the supplementary benefit scale rate. The Government's approach recognises this, and—in effect—avoids double-counting while maintaining full price-protection for all claimants. In addition, as with other benefits, we will he making good the 2 per cent. shortfall. The effect of this will be that the increase in the scale rates will be 10.5 per cent., but housing costs will of course be paid on top of that. The ordinary supplementary benefit scale rate will therefore rise from £23.25 to £25.70 for a single householder and from £37.75 to £41.70 for a married couple. The long-term scale rate will rise from £29.60 to £32.70 for a single householder and from £47.35 to £52.30 for a couple. The scale rates for children will rise from £7.90 to £8.75 for children aged 10 and under, and from £11.90 to £13.15 for children aged 11 to 15. There has been a great deal of concern about the effects of the capital limit for supplementary benefit. This is the limit on the amount of capital a person can have and still get supplementary benefit. It has been argued that the current limit of £2,000 set in November 1980 is now too low. The Government recognise the force of the argument and proposes to raise the limit by 25 per cent. to £2,500. This will fully restore the value the limit held when it was introduced. We also propose a further small, but worthwhile, improvement in the supplementary benefit scheme. We are increasing the amount of occasional payments by way of a gift, for example, at Christmas or for a birthday, which can be disregarded. At present any excess over £20 is deducted from benefit. We propose to increase the amount that can be totally disregarded to £100. Supplementary benefit heating additions are now paid to over 2 million families. In 1980 we boosted them with a record increase. The 1981 uprating turned out to be more than enough fully to protect this increase against rising fuel costs. For 1982 we propose to increase the heating additions from this higher base in line with the expected rise in fuel prices between November 1981 and November 1982. The standard amount will rise from £1.65 to £1.90 a week, and the higher rate from £4.05 to £4.65. As the Chancellor announced yesterday, mobility allowance will no longer be subject to tax. I am sure the whole House will welcome that change, which will benefit some 40,000 recipients who have other taxable income. In addition, the rate of mobility allowance will be increased in November from £16.50 to £18.30. This means that since coming to office we have increased the rate of mobility allowance by 83 per cent. These measures will help even more disabled people to take advantage of the Motability scheme for leasing or buying cars on advantageous terms. I have also decided to make an improvement in the rules affecting invalid care allowance. The weekly amount which can be earned by someone who is looking after a severely disabled person will be increased from £6.00 to £12.00. The disregard has been £6.00 since the benefit was introduced in 1976 and the increase will restore its original value. A further improvement affects the therapeutic earnings limit, which helps people recovering from illness who want to get back into full-time work. The present earnings limit is £16.50. I intend to raise this by 21 per cent. to £20. The Christmas bonus of £10 will be paid on the same basis as last year in the week commencing 29th November. I also propose to increase the earnings rule limit for retirement pensioners in November from £52.00 to £57.00, the first such increase in three years. The total cost of this uprating will he close to £3 billion in a full year, of which about £2 billion will fall on the National Insurance Fund, the balance coming out of the Consolidated Fund. The House has already approved the changes in contribution levels in 1982–83 set out in the Social Security (Contributions) Act 1982, and I shall as usual further review contribution rates in the autumn. Any necessary changes will take effect from April 1983. These proposals mean that annual expenditure on social security benefits will rise to over £30 billion in 1982–3, which represents about 26 per cent. of all public spending. The changes I have announced mean:

  • full price protection of all weekly benefits;
  • the 2 per cent. shortfall in 1981 made good for all benefits;
  • the supplementary benefit capital limit increased to £2,500;
  • supplementary benefit heating additions protected against rising fuel costs;
  • the retirement pension earnings rule increased for the first time in three years;
  • mobility allowance taken out of tax and fully price-protected;
  • a doubling of the earnings disregard for those receiving invalid care allowance;
  • an increase of more than 20 per cent. in the therapeutic earnings limit for those receiving incapacity benefits.
The measures will particularly benefit the elderly and disabled people. They will also give valuable extra help to all families with children. They are designed to bring practical help to those who most need it. INCREASED BENEFIT RATES (The Social Security Act 1975, as amended, is referred to as "the Act"; the Social Security Pensions Act 1975, as amended, is referred to as "the Pensions Act").

PART 1 BENEFITS PAYABLE FROM NATIONAL INSURANCE FUND (See also Parts 3 and 4)
Existing weekly rate £ Proposed weekly weekly rate £
Basic component of Category A retirement pension* (section 6(1)(a) of the Pensions Act), Category B retirement pension* (section 7 of the Pensions Act), widowed mother's allowance and widow's pension 29.60 32.85
Existing weekly rate £ Proposed weekly rate £
Category B retirement pension* (section29(7)(a)(i) of the Act) 17.75 19.70
Basic component of invalidity pension 28.35 31.45
Standard rate of unemployment and sickness benefit
Beneficiary under pension age 22.50 25.00
Beneficiary over pension age 28.35 31.45
Invalidity allowance:
Higher rate 6.20 6.90
Middle rate 4.00 4.40
Lower rate 2.00 2.20
Maternity allowance 22.50 25.00
Widow's allowance 41.40 45.95
Child's special allowance 7.70 7.95
Guardian's allowance 7.70 7.95

The weekly rate of graduated retirement benefit payable for each unit of graduated contributions will be increased by 11 per cent. from 3.86 pence to 4.28 pence.

The following sums will be increased by 11 per cent.:—

  1. (a) additional components in the rates of long-term benefits calculated by reference to any final relevant year earlier than the tax year 1982–83;
  2. (b) increases of retirement pensions for deferred retirement under Schedule 1 to the Pensions Act;
  3. (c) increases of graduated retirement benefit for deferred retirement under Schedule 2 to the Social Security (Graduated Retirement Benefit) (No. 2) Regulations 1978;
  4. (d) increments in guaranteed minimum pensions under section 126A of the Act.

*An age addition of 25p is payable to retirement pensioners who are aged 80 or over.

PART 2 BENEFITS PAYABLE FROM CONSOLIDATED FUND (But see also Parts 3 and 5 to 8)
Existing weekly rate £ Proposed weekly rate £
Attendance allowance
Higher rate 23.65 26.25
Lower rate 15.75 17.50
Non-contributory invalidity pension 17.75 19.70
Invalid care allowance 17.75 19.70
Mobility allowance 16.50 18.30
Category C or D retirement pension*
Higher rate 17.75 19.70
Lower rate 10.65 11.80
*An age addition of 25p is payable to retirement pensioners who are aged 80 or over.
PART 3 INCREASES FOR DEPENDANTS
Existing weekly rate £ Proposed weekly rate £
Increase for a wife or other adult dependant of:—
Category A or B retirement pension 17.75 19.70
Invalidity pension 17.00 18.85
Unemployment benefit and sickness benefit (where beneficiary is over pensionable age) 17.00 18.85
Unemployment benefit and sickness benefit (where beneficiary is under pensionable age) and maternity allowance 13.90 15.45
Non-contributory invalidity pension, in valid care allowance and Category C re tirement pension 10.65 11.80
Increase for a qualifying child of:—
Widow's allowance, widowed mother's allowance, invalidity, non-contributory invalidity, and retirement pensions, in valid care allowance, unemployment and sickness benefit (where beneficiary is over pensionable age) and child's special allowance 7.70 7.95

Existing weekly rate £ Proposed weekly rate £
Unemployment benefit and sickness benefit (where beneficiary is under pensionable age) and maternity allowance 0.80 0.30

PART 4 INDUSTRIAL INJURIES BENEFT
Existing weekly rate £ Proposed weekly rate £
Injury benefit:
(a) beneficiary 18 or over or entitled to increase for child or adult dependant 25.25 27.75
(b) beneficiary under 18 and not entitled to such an increase 22.50 25.00
Disablement pension:
(a) beneficiary 18 or over or entitled to increase for child or adult dependant—
Degree of disablement per cent.
100 48.30 53.60
90 43.47 48.24
80 38.64 42.88
70 33.81 37.52
60 28.98 32.16
50 24.15 26.80
40 19.32 21.44
30 14.49 16.08
20 9.66 10.72
(b) beneficiary under 18 and not entitled to such an increase—
Degree of disablement per cent.
100 29.60 32.85
90 26.64 29.57
80 23.68 26.28
70 20.72 23.00
60 17.76 19.71
50 14.80 16.43
40 11.80 13.14
30 8.88 9.86
20 5.92 6.57

Maximum disablement gratuity will be increased from £3,210 to £3,560.

Existing weekly rate £ Proposed weekly rate £
Unemployability supplement 28.35 31.45
Increase of unemployability supplement for early onset of incapacity for work:
(a) if on the qualifying date the beneficiary was under the age of 35, or if that date fell before 5th July 1948 6.20 6.90
(aa) if (a) does not apply and on the qualifying date the beneficiary was under the age of 40 and he had not attained pensionable age before 6th April 1979 6.20 6.90
(b) if (a) and (aa) do not apply and on the qualifying date the beneficiary was under the age of 45 4.00 4.40
(bb) if (a), (aa) and (b) do not apply and on the qualifying date the beneficiary was under the age of 50 and had not attained pensionable age before 6th April 1979 4.00 4.40
(c) in any other case 2.00 2.20
Maximum increase of disablement pension in cases of special hardship 19.32 21.44*
Maximum increase of disablement pension where constant attendance needed:
(a) except in cases of exceptionally severe disablement 19.40 21.50
(b) in any case 38.80 43.00
Increase of weekly rate of disablement pension for exceptionally severe disablement 19.40 21.50
Increase of injury benefit for dependent children 0.80 0.30
Existing weekly rate £ Proposed weekly rate £
Increase of disablement pension with unemployability supplement for dependent children 7.70 7.95
*or the amount (if any) by which the weekly rate of the pension, apart from any increase under sections 61, 63, 64 or 66 of the Act falls short of £53.60, whichever is the less.
Existing weekly rate £ Proposed weekly rate £
Increase of injury benefit for adult dependant 13.90 15.45
Increase of disablement pension with unemployability supplement for adult de pendant 17.00 18.85
Widow's pension—
(a) initial rate 41.40 45.95
(b) higher permanent rate 30.15 33.40
(c) lower permanent rate 8.88 9.86
Widower's pension 30.15 33.40
Allowance under section 70 of the Act in respect of each qualifying child—
(a) higher rate 7.70 7.95
(b) lower rate 0.80 0.30
Maximum under section 91(1) of the Act of aggregate of weekly benefit payable for successive accidents—
(a) beneficiary 18 or over or entitled to an increase in respect of a child or adult dependant 48.30 53.60
(b) beneficiary under 18 and not entitled to such an increase 29.60 32.85
Maximum weekly rate of lesser incapacity allowance supplementing workmen's compensation (Section (6)(c) of the Industrial Injuries and Diseases (Old Cases) Act 1975) 17.75 19.70
Weekly rate of allowance payable where disablement is not total (Section 7(2)(b) of the Industrial Injuries and Diseases (Old Cases) Act 1975) 17.75 19.70
PART 5 MAIN INCREASED SUPPLEMENTARY BENEFIT RATES
Existing ordinary weekly rate £ Existing long-term weekly rate £ Proposed ordinary weekly rate £ Proposed long-term weekly rate £
Supplementary benefit:
Couple 37.75 47.35 41.70 52.30
Single householder 23.25 29.60 25.70 32.70
Non-householder—
age 18 and over 18.60 23.65 20.55 26.15
age 16–17 14.30 18.15 15.80 20.05
Existing weekly rate £ Proposed weekly rate £
Any other person aged:
11–15 years 11.90 13.15
under 11 years 7.90 8.75
Existing ordinary weekly rate £ Existing long-term weekly rate £ Proposed ordinary weekly rate £ Proposed long-term weekly rate £
Boarders' Personal Expenses
Couple 15.40 17.10 17.00 18.90
Single person 7.70 8.55 8.50 9.45

Existing weekly rate £ Proposed weekly rate £
Personal expenses for dependent children aged:
18–19 years 7.70 8.50
16–17 years 4.60 510
11–15 years 3.95 4.35
0–10 years 2.60 2.85

Existing weekly rate £ Proposed weekly rate £
Non-householder housing addition 2.55 *
Heating additions to supplementary benefit 1.65 1.90
4.05 4.65
Dietary additions to supplementary benefit 1.30

3.05

8.70

 *
Blindness addition to supplementary benefit (unchanged) 1.25 1.25
Addition for claimant or dependant over age 80 (unchanged) 0.25 0.25
Existing level £ Proposed level £
occasional gifts—level of disregard 20.00 100.00
Supplementary benefit—capital cut-off 2,000.00 2,500.00
*To be announced after the February index of retail prices becomes available.

PART 6

MAIN INCREASED WAR PENSION RATES

All ranks receive the same increases, officers' rates being expressed in pounds per annum.

Existing weekly rate £ Proposed weekly rate £
Disablement benefits:
Disablement pension for private at 100 per cent. rate 48.30 53.60
Age allowance with assessments of:
40 to 50 per cent 3.35 3.70
Over 50 and not exceeding 70 per cent. 5.25 5.85
Over 70 and not exceeding 90 per cent. 7.50 8.35
Over 90 per cent. 10.50 11.70
Unemployment allowances
Personal allowance 31.40 34.85
Increase for wife or other adult dependant 17.75 19.70
Increase for child 7.70 7.95
Invalidity allowances
Higher rate 6.20 6.90
Middle rate 4.00 4.40
Lower rate 2.00 2.20
Constant attendance allowance
Special maximum 38.80 43.00
Special intermediate 29.10 32.25
Normal maximum 19.40 21.50
Half and quarter day 9.70 10.75
Comforts allowance
Higher rate 8.40 9.30
Lower rate 4.20 4.65
Allowance for lowered standard of occupation (maximum) 19.32 21.44
Exceptionally severe disablement allowance 19.40 21.50
Severe disablement occupational allowance 9.70 10.75
Existing annual rate £ Proposed annual rate £
Clothing allowance
Higher rate 65.00 72.00
Lower rate 41.00 46.00
Existing weekly rate £ Propose weekly rate £
Death benefits:
Widow's pension—private's widow:
Standard rate 38.45 42.70
Childless widow under 40 8.88 9.86
Widow's children 10.85 11.25
Rent allowance (maximum) 14.65 16.25
Motherless and fatherless children 11.65 12.15
Age allowance for elderly widows
Ages 65–69 3.75 4.15
Age 70 and over 7.50 8.30
Adult orphans 29.60 32.85
Widowers'pension (maximum) 38.45 42.70

PART 7

FAMILY INCOME SUPPLEMENT

Existing weekly level £ Proposed weekly level £
Family Income Supplement
Prescribed amount for family with one child (gross income below which FIS is payable) 74.00 82.50
Increase in prescribed amount for each additional child 8.00 9.00
Maximum weekly amount for a one-child family 18.50 21.00
Increase in maximum amount for each additional child 1.50 2.00

PART 8

CHILD BENEFIT

Existing weekly rate £ Proposed weekly rate £
Child benefit—
each child 5.25 5.85
One-parent benefit—
first or only child of certain lone persons 3.30 3.65

PART 9

EARNINGS RULES

The amount specified in Section 30(1) of the Act (amount of weekly earnings which must be exceeded before a Category A or Category B retirement pension is reduced by reference to earnings) will be increased to £57.00.

The amount specified in regulation 8(1) of the Social Security (Invalid Care Allowance) Regulations 1976 (amount of personal weekly earnings above which invalid care allowance is not payable) will be increased to £12.00.

PART 10

THE THERAPEUTIC EARNINGS LIMIT

The amount of net earnings from permitted work (the "therapeutic earnings limit") which can be received without loss of benefit by claimants to sickness, injury and invalidity benefits and non-contributory invalidity pension will be increased from £16.50 to £20.00 per week.

The corresponding level of earnings which a beneficiary can be capable of earning without losing entitlement to an Unemployability Supplement to the industrial injuries disablement pension will be increased from £858 to £1,040 per annum.