§ Mr. Carter-Jonesasked the Secretary of State for Social Services whether he has completed his review of the rates of car allowances payable to war pensioners.
§ Mr. Bowdenasked the Secretary of State for Social Services whether he has completed his review of the rates of car allowances payable to war pensioners.
§ Mr. Alfred MorrisYes. I am glad to announce that both the car maintenance allowance and the war pensioners' private car maintenance allowance will be substantially increased later this year.
The car maintenance allowance is a contribution towards the cost of maintaining cars loaned by my Department to war pensioners and to certain beneficiaries of the former National Health Service Vehicle Scheme. It is paid on a scale, related to the age of the car in question, of £35 a year (for the first two years), £55 a year (for the third and fourth years) and £65 a year (for the fifth and later years). These rates will be increased to £50 a year, £90 a year and £150 a year respectively with effect from 15th July 1978. Overall we estimate that these increases will mean a doubling of expenditure in a full year. All the other benefits for war pensioners provided with cars by my Department, such as petrol tax allowance, garaging supplement, free comprehensive insurance and exemption from vehicle excise duty, will remain unchanged.
War pensioners who are eligible for the loan of a car, under the war pensioners' vehicle scheme, may choose instead to receive a private car maintenance allowance as a contribution towards the cost of running their own vehicles. This allowance will be increased to £250 a year tax free. The new rate will be effective from 5th July 1978, and the first payment at the new rate, with arrears, will be paid on 1st October. Recipients of this allowance will also continue to receive exemption from vehicle excise duty.
Similar arrangements will be made in Scotland, Wales and Northern Ireland.