§ 2.46 p.m.
§ Lord Higginsasked Her Majesty's Government:
On what basis the amount of hospital downrating is calculated and by whom it is calculated.
§ The Parliamentary Under-Secretary of State, Department for Work and Pensions (Baroness Hollis of Heigham)My Lords, the reduction of benefit of a hospital in-patient is made by reference to a percentage of the basic state retirement pension, which is set out in legislation. The calculation is carried out by a decision-making officer on behalf of the Secretary of State for Work and Pensions.
§ Lord HigginsMy Lords, I thank the Minister for that Answer. However, will she tell the House when the quantitative estimate was last made? Is she aware that there is a widespread feeling among many people—some of whom are surprised to find that the downrating rule exists at all—that the actual amount deducted is not at all appropriate for the present situation? This has changed radically over the years in terms of house ownership, overhead costs and so on. Is there not a case for an impartial evaluation of what the actual amount deducted ought to be?
§ Baroness Hollis of HeighamMy Lords, the decision in terms of percentages was laid down in the Social Security (Hospital In-Patients) Regulations 1975. It was based on a percentage of retirement pension. As the retirement pension has risen, the percentage has, of course, risen with it.
The noble Lord asked whether the figures would be reviewed. As of a few months ago, we have been able to reduce the number of people caught by hospital downrating by changing the limit of a hospital stay before downrating occurs from six weeks to 13 weeks. As a result, instead of 35,000 people losing benefit, only 9,000 will do so in future.
Finally, the noble Lord asked me what percentage of income that may represent. For the average pensioner couple the amount of benefit reduction represented by hospital downrating is 5 per cent.
§ Lord GeddesMy Lords, who, or what, is a decision-making officer? Who decides who shall be a decision-making officer?
§ Baroness Hollis of HeighamMy Lords, the decision-making officer in this case is an administrative officer within the Civil Service in the local benefits office. The same official also decides eligibility for DLA, income support, JSA and similar related benefits.
§ Baroness BarkerMy Lords, can the Minister confirm that the percentage to which she referred has in fact dropped from 40 to 38 per cent of state retirement pension? What steps is the department taking to inform patients in acute and intermediate 1141 care of their responsibility to notify housing benefit and council tax benefit offices of a change in circumstances under the current system and under the new system?
§ Baroness Hollis of HeighamMy Lords, the noble Baroness says that the percentage has fallen from 40 to 38 per cent. I am sorry to be a pedant about these matters, but the figure is 39 per cent. That is based on a percentage of retirement pension. If other benefits, savings income and income from occupational pensions are added in, it represents about 5 per cent of an average pensioner couple's income.
The noble Baroness makes an entirely valid point about those who may be in long-term or intermediate care beyond 12 months. As she will know, housing benefit runs for 12 months; thereafter, the application must be renewed. There is clearly an obligation on the department to ensure that pensioners in that situation are informed that they need to review their relationship with the local authority.
§ Baroness Finlay of LlandaffMy Lords, how much does the administration of the system cost? is the system of downrating cost-effective in proportion to the amount of money saved?
§ Baroness Hollis of HeighamMy Lords, the amount of money saved by moving to the 13-week rule—in other words, the 9,000 pensioners and others on benefit who remain in hospital for longer than 13 weeks—is in the order of some £40 million. The cost of administration is £4.5 million. Of that, only half a million pounds is actually associated with process—that is, putting the "flags" on the computer—and £4 million is associated with the point made by the noble Baroness, Lady Barker, which is that often people take time to tell us that they have gone into hospital. Therefore, £4 million of the £4.5 million cost comprises recovering overpayments. As I say, administration accounts for only half a million pounds of around £100 million-worth of benefit costs.
§ Lord HigginsMy Lords, I was surprised by the Minister's Answer. Does she accept that this has not changed since 1975, which is a long period of time, and that the percentage of the pension measure takes no account whatever of changes in the general pattern of life in terms of house ownership, whether people have refrigerators or whether the whole situation has changed? Surely we need an independent appraisal of the actual amount.
§ Baroness Hollis of HeighamMy Lords, the percentage is based on the provision which the noble Lord knows perfectly well is embedded in social security; that is, that there is not double provision. In other words, if you are a widow you do not receive a carer's allowance; if some of your food, heating and laundry costs are met by a hospital, you do not also receive payment for that. The percentage has remained the same; the actual costs have obviously changed because retirement pension and incomes have 1142 increased. It is because we recognise that people's methods of payment and how they organise their finances have changed since the ration book era that we have gone from six weeks' withdrawal of benefit to 13 weeks', thus allowing people who pay their bills monthly or quarterly to have ample time to adjust them.