§ Mr. StunellTo ask the Secretary of State for Work and Pensions what plans he has to bring calculations of claimants' notional rates of interest on savings into line with current average building society and bank deposit account interest rates. [142297]
§ Mr. PondThe tariff income rules, whereby money is deducted from benefit in respect of capital, are not intended to represent any rate of return that could be obtained from investing that capital.
The capital rules within the income related benefits exist to ensure that help is targeted on those with least resources while not completely denying help for those who have moderate amounts of capital. Where customers have substantial capital, current rules ensure that some of those funds are used for their maintenance before their needs can be met from public funds. The tariff income rules are designed to avoid a "cliff edge" effect which would occur if there was a simple capital limit beyond which benefit is completely withdrawn.
We have made it clear that we will keep the treatment of capital in the income related benefits under review so that they strike a reasonable balance between providing targeted support for those who need it and not penalising those who have acted responsibly by saving.