Supplementary Benefit (Hansard, 7 December 1979)

§ 1971 Mrs. Chalker

The impact on claimants will depend upon the overall effect of the changes outlined in Cmnd. 7773, some of which result in gains and others in losses, rather than on the individual effect of each change, because claimants can be affected by more than one change.

There will be special transitional rules to prevent an overall loss of benefit income for the vast majority of claimants. The only exception will be claimants with capital in excess of £2,000 who will cease to be entitled to benefit.

The changes are planned to take place at the same time as next year's uprating. It will not be possible to estimate firmly the effect of the proposals until the levels of the benefit rates are known, and until more up-to-date information becomes available about the numbers of claimants in the various categories, and the levels of their resources and rents.

A tentative estimate can be made on the basis of information about claimants in November 1978, the most recent information available. On that basis, the impact of the proposed changes will be that about ¾million claimants will gain, about 1¾ million will lose, and some½million will neither gain nor lose. Those who lose will be mainly single people, and over two-thirds of them will receive up to 40p less at the uprating than they would otherwise have done.

Subject to the above reservations, the effect of individual changes, is whether they tend to produce gains or losses, or both, would be as follows.

Bringing supplementary benefit and national insurance rates into line

Claimants assessed on the ordinary rates would receive more benefit; in November 1978 they numbered about 372W 553,000. Claimants assessed on the long-term rates would receive less than they would otherwise have received at the uprating: they numbered about 1,889,000.

Qualifying period for long-term rates

In November 1978 there were about 98,000 claimants who had received supplementary allowance for at least one year but less than two years. They would qualify immediately for the higher long-term rates of benefit.

More benefit for children

There were about 341,000 claimants in November 1978 with about 439,000 children aged 0–4 and 11–12, and they would gain from the reduction in the number of scale rates for children.

Entitlement of people leaving full-time education under the age of 19

About two-thirds of school leavers are assumed to claim supplementary benefit, that is about 400,000 out of a total of about 650,000 leavers. The parents of school leavers will gain from the extension of child benefit and increases to any supplementary benefit or other social security benefit they are receiving. Those school leavers who would otherwise have claimed supplementary benefit will lose, depending on the detailed rules that are prescribed. These estimates are based on analyses of education, unemployment and benefit claim statistics.

Standard contributions towards housing costs from non-dependants

In November 1978 there were some 320,000 householder claimants with non-dependants living with them who might be affected by the change. Whether a claimant would gain or lose would depend on the actual contribution made by, and the number of non-dependants in, the household, the level of housing costs, whether a non-dependant was himself in receipt of supplementary benefit (in which case there would be no change) and the rate of contribution actually prescribed in 1980. On the assumption of a standard contribution of around £3.80 from non-dependants not receiving supplementary benefit, there would be roughly twice as many losers as gainers.

Rules about capital

There were some 36,000 claimants in November 1978 with capital of between 373W £1,200 and £2,000 and they would gain because a tariff income would no longer be assumed. The 13,000 who then held over £2,000 would no longer be entitled to benefit.

Rules about earnings

The 7,000 unemployed claimants who, in November 1978, had earnings in excess of £2 would gain from the proposed flat-rate disregard of £4 for adults. Some 21,000 lone parents would gain from the additional tapered disregard; about 22,000 lone parents would lose, but this is on the unlikely assumption that no lone parents would increase their earnings to take advantage of the new tapered disregard.

Occupational pensions

Discontinuing the £1 disregard of occupational pensions will result in losses; about 202,000 claimants had such pensions in excess of £1 in November 1978.

War and industrial widows pensions

Bringing the treatment of industrial widows pensions into line with that of war widows pensions, will benefit industrial widows; the number on supplementary benefit is small.

Sick pay from an employer

Claimants in receipt of employer's sick pay, who would lose from cessation of the disregard, are not separately identified but are likely to be very few.

Equal treatment for men and women

The only financial advantage from the proposal would be for couples who would qualify for the leng-term rate when either was 65, rather than just the man as at present; there were about 6,000 such couples in November 1978.

Liability for sponsored relatives admitted under the Immigration Act

Very few claimants would be affected, and none would lose.

Definition of full work

No (or very few) claimants would lose, depending on the detailed rules.

Over-80's rate extended to married couples

Couples who were both aged eighty or over would gain, and none would lose; there were about 7,000 such couples in November 1978.

374W

Special rates for the blind to continue

Blind couples and single blind claimants aged 16–17, of whom there were fewer than 500 in November 1978, would gain. No claimants would lose.

Entitlement when claimant abroad

Most claimants other than those required to register for employment would be entitled to benefit under this proposal. but the number who would gain cannot be quantified.

Exceptional needs payments (ENPs) for recipients of benefit more closely defined

All claimants would gain from the new legal entitlement to single payments in prescribed circumstances. Current practice on the award of ENPs varies considerably in different localities, and the impact on individual claimants will depend on the detailed proposals to be made in regulations and the existing practice in their area.

No ENPs for non-recipients of benefit

National statistics are not available, but on the basis of some regional estimates the number of ENPs awarded to non-recipients of weekly supplementary benefit may be around 10,000 each year.

Laundry additions

The effect of the proposal would be that claimants who have special laundry expenses of 40p or more would receive 30p less for their laundry expenses than at present; there were 146,000 such claimants in November 1978.