§ Lord Rix
asked Her Majesty's Govnerment:
What is their revised estimate of the savings expected to arise from the proposals to abate Incapacity Benefit by reference to occupational pension in the light of the further proposal to 146WA exempt from this measure those who are entitled to the highest rate care component of Disability Living Allowance. [HL4339]
§ Baroness Hollis of Heigham
Under the Government's original proposals for taking some account of occupational and personal pensions in Incapacity Benefit, it was estimated that benefit expenditure would be reduced by £45 million in Year 1, £120 million in Year 2, £190 million in Year 3 and £550 million in Year 10 (net of tax £40 million, £100 million, £150 million and £410 million respectively). Revised savings esitmates are now £25 million in Year 1, £75 million in Year 2, £120 million in Year 3 and £330 million in Year 10 (net of tax £25 million, £60 million, £90 million and £260 million respectively). These estimates take into account both the exemption of people receiving the highest rate care component of Disability Living Allowance, and the increase from £50 a week to £85 a week in the threshold above which pensions begin to be taken into account for other recipients. Within this, the reduction in savings as a result of the Disability Living Allowance exemption is about £5 million in the first two years, £10 million in year 3 and £20 million in Year 10.