HL Deb 19 March 1997 vol 579 cc893-4

Baroness Fisher of Rednal asked Her Majesty's Government:

What savings occur from the financial penalty imposed on persons on state retirement pensions who spend up to six weeks a year in hospital.

The Minister of State, Department of Social Security (Lord Mackay of Ardbrecknish)

My Lords, data are not available to calculate savings from downrating of retirement pensions for stays in hospital of up to six weeks. The only cases where downrating applies during the first six weeks of a hospital stay are where the person goes into hospital from a council home. The estimated total saving from hospital downrating of state retirement pensions is some £60 million a year, almost all of which comes from downrating after six weeks.

Baroness Fisher of Rednal

My Lords, does the Minister agree that the people concerned have earned that pension, by their entitlement and through the insurance scheme? Does he further agree that when they go into hospital they are still faced with the same responsibilities to keep the home going, whether it be house, bungalow or flat? Is it right that they should then be deprived of that money if they spend more than six weeks in hospital undergoing treatment which is designed to make them better, when going there is not their personal choice?

Lord Mackay of Ardbrecknish

My Lords, the downrating of the state pension when someone is in hospital for over six weeks and the further downrating when they are in hospital for over 52 weeks is of long standing and has been the policy of governments of both parties since the inception of the pension system in 1948. Of course, the pension is not all lost. The downrating is merely a portion of the pension after six weeks and then a slightly larger portion after 52 weeks. The reason is that, if the state is looking after many of the person's needs in hospital, it would be double provision to continue to pay the pension should they be in hospital for some time. The state system is pay-as-you-go, unlike Basic Pension Plus, which we have just announced and which would be funded.

Lord Stoddart of Swindon

My Lords, does the Minister agree that whether it is something which has been operated by all kinds of governments does not matter? The fact is, as my noble friend said, that it is an insurance-based pension. Let us make no mistake about that. It has been contributed to by pensioners and it is their money. Will he accept that other people are not similarly disadvantaged when they go into hospital, and it is about time that the Government, of whatever colour, reviewed their policy and ceased to penalise older people when they go into hospital?

Lord Mackay of Ardbrecknish

My Lords, the fact of the matter is that pensions are paid out of the taxes and national insurance contributions collected in the same year as the pensions are paid out. As I mentioned, it is not a properly funded policy. The point is that the taxpayer and national insurance payer are paying to look after someone in hospital for more than six weeks initially and, if it goes on, for more than 52 weeks. It seems to me that it is double provision if they get the help there and at the same time receive their full retirement pension. I believe that they get sufficient of their retirement pension to continue with any responsibilities for their house and so on that they might have. But if the noble Lord wants the social security budget to rise by another £60 million, I suggest that he talks to his honourable friend Gordon Brown about his suggestion that the budget that we are providing for the next two years is perfectly adequate in social security.

Baroness Fisher of Rednal

My Lords, will the noble Lord clarify that £60 million? How many persons does it represent in one year who are benefiting from the state, as the noble Lord said? How many persons are involved?

Lord Mackay of Ardbrecknish

My Lords, the position on downrating is that approximately 35,000 people at any one time have their pension downrated. Approximately 20,000 of them are in the six to 52-week period and approximately 15,000 are in the over-52-week period.

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