HC Deb 04 February 1998 vol 305 cc702-3W
Mr. Cousins

To ask the Secretary of State for Social Security if she will include in her spending reviews consideration of a free contribution credit for workers with earnings below the lower earnings limit for(a) statutory maternity pay, (b) contributing jobseekers and (c) basic retirement pension; and if she will estimate the spending consequences of the introduction of such credits. [24355]

Mr. Denham

The Comprehensive Spending Review demonstrates that the Government are committed to a far-reaching overhaul of the Social Security system that will modernise the welfare state and prepare it to meet the challenges of the 21st century. Based on our clear objectives of promoting work incentives, reducing poverty and welfare dependency and strengthening community and family life, the review is examining the purpose and nature of each major component of the system. The review is not due to complete its work until the summer and no options have been ruled in or out at this point. It is still too soon to anticipate the outcome.

Class 1 National Insurance contribution credits may assist people to qualify for basic Retirement Pension and contributions-based Jobseeker's Allowance. These credits are currently available to people with earnings below the lower earnings limit who work for less than 16 hours a week and are available for and actively seeking employment or who are receiving Disability Working Allowance or Invalid Care Allowance. Class 3 credits are available to those receiving Family Credit to help them qualify for basic Retirement Pension. Those caring for a severely disabled person or receiving Child Benefit may also be eligible for Home Responsibilities Protection, which reduces the number of qualifying years of paid or credited contributions required for a basic Retirement Pension.

Statutory Maternity Pay is paid by employers to employees who on average, had weekly earnings at or above the lower earnings limit who had been continuously employed for at least 26 weeks up to the 15th week before their baby is expected.

Estimates of the effects on expenditure on contributions-based Jobseeker's Allowance and basic Retirement Pension if credits were awarded to everyone with earnings below the lower earnings limit are not available.