Industrial Injuries Scheme (Hansard, 17 April 1986)

§ Mr. Newton

The Government are grateful for the many helpful suggestions made by the 43 individuals and organisations, including the Industrial Injuries Advisory Council, which commented on the consultation paper._* I am responding separately to the points raised by the council, and placing a copy of my reply to it in the Library. In the light of the responses made, we have decided to proceed as follows:

Disablement Benefit

The consultation paper proposed that disablement benefit should not be paid for disablement below 15 per cent. We continue to believe that compensation for loss of earnings is more important than compensation for loss of faculty at this level of disablement. However, in recognition of the concern expressed, particularly over injuries such as the loss of an index finger, which is assessed as 14 per cent. disablement, we have decided to lower the threshold for payment to 14 per cent. The effects 444W of separate injuries will be aggregated and benefit paid if the total disablement from occupational causes is 14 per cent. or more. Disablement due to the progressive industrial diseases pneumoconiosis, byssinosis and diffuse mesothelioma will continue to be compensated at all levels.

Special Hardship Allowance

The allowance will be independent of disablement benefit and renamed "reduced earnings allowance". It will continue to be paid at levels of disablement below 14 per cent. It will also be payable in full for the first time to the more severely disabled whose total benefit by way of the allowance and disablement benefit cannot at present exceed the 100 per cent. rate of the latter.

Most respondents accepted that the allowance should not continue in full after retirement. They considered, however, that some payment should be made to compensate those whose additional earnings-related pension had been reduced because of their industrial disablement. We have decided that a better solution would be to fix the allowance at the rate obtaining on retirement and offset it against any additional pension paid. This will ensure that no beneficary will suffer a large drop in income on retirement, since the allowance will be withdrawn only to the extent that additional pension becomes payable. We also propose that the allowance should be offset against any additional pension payable with invalidity benefit to those who have not retired. As the invalidity addition payable with invalidity benefit is already offset against additional pension, the allowance would also be offset against the addition. For those already retired or receiving invalidity benefit, the allowance will be offset only against future increases of additional pension.

Most respondents favoured our proposals concerning the indexation of awards of the allowance. Some suggested, however, that beneficiaries should be able to have an award reviewed if they felt that, as a result, the allowance ceased accurately to reflect their earnings loss. In proceeding with the proposal, we intend to provide for such a right of review.

Industrial Death Benefit

While some respondents argued for improvements to industrial death benefit, most accepted that it was not worth retaining if it was to continue at the same very small cash differential over national insurance widows pension, which has in fact been unchanged at the present 55 pence under successive governments since 1967. We therefore propose to align provision for industrial widows with that in the main scheme. Existing industrial widows will not experience any cash loss. In addition, the law will be changed so that future industrial widows will not have to satisfy the contribution conditions for national insurance widows' benefits. This will ensure that they will be able to receive the new tax-free lump sum of £1,000 which we propose to pay to national insurance widows, as well at the same weekly benefits for older widows and widows with dependent children as are proposed in the current Social Security Bill.

Constant Attendance Allowance

The consultation paper proposed that CAA should be discontinued, leaving the industrially disabled in need of care and attention to rely on attendance allowance. Many respondents did not favour this change, because CAA can 445W be paid at higher rates than AA. We continue to believe that the present dual provision is unsatisfactory, but have decided to defer final decisions so that further consideration can be given to the most suitable means of replacing CAA.

Accidents Abroad

All respondents welcomed the proposed extension of the scheme to cover accidents outside the European Community and those countries with whom there are reciprocal agreements in force. We will therefore extend the scheme to cover any employment abroad while the employer has to pay contributions for the employee concerned and voluntary service workers overseas who continue to pay United Kingdom contributions.

Other Proposals

The replacement of unemployability supplement by invalidity benefit was universally favoured. The majority of respondents agreed that hospital treatment allowance should be abolished. We shall proceed with both changes.

Legislation

We propose to introduce the legislation necessary to implement these changes as announced on 19 December in reply to my hon. Friend the Member for Brighton, Kemptown (Mr. Bowden), at column 310, by tabling new clauses to the current Social Security Bill.

_* "Industrial Injuries Scheme: A Consultation Paper". Issued by DHSS—December 1985.