§ Mrs. Haymanasked the Secretary of State for Social Services (1) whether he will consider ending the automatic loss of invalidity benefit on reaching the age of 70 years; and if he will make a statement;
(2) how many recipients of invalidty benefit lose it each year on reaching the age of 70 years.
§ Mr. OrmeInvalidity benefit—and sickness benefit—ceases when the beneficiary recovers or when he retires from regular employment or reaches the age when he is deemed to be retired for national insurance purposes—which is 70 for men and 65 for women. At retirement, or deemed retirement if this comes earlier, incapacity benefits are replaced by retirement pension at a rate which includes any invalidity allowance in payment. Precise figures as to the numbers of people receiving invalidity benefit when they reach 70(65) are not available, but it is estimated that the number might be of the order of 2,000.
418W"Deemed" retirement was provided for because otherwise some people who never retire, such as certain farmers and owners of small businesses, would be unable ever to qualify for the retirement pension for which they had contributed. My hon. Friend no doubt has in mind the fact that invalidity—and sickness—benefit is not taxed because of the very considerable practical problems in the way of taxing incapacity benefits, while retirement pension is taxed. However, to allow retirement pensioners who have been receiving incapacity benefits up to age 70(65) to draw retirement pension tax free, or to continue to receive instead tax-free incapacity benefits, would not be fair to other pensioners whose incomes are no larger. No tax, of course, is payable where an individual's total income, including the national insurance retirement pension, is less than the age allowance for tax purposes.