§ Keith VazTo ask the Secretary of State for Work and Pensions if he will make a statement on the report of the National Audit Office on the failure of pensioners to claim their entitled benefits. [83663]
§ Mr. McCartneyThe National Audit Office Report entitled "Tackling pensioner poverty: Encouraging take-up of entitlements", recognises the good progress the Department has made in helping pensioners to take up their entitlements. The Government are committed to tackling pensioner poverty.
We have already made substantial progress in taking forward the NAO recommendations, and welcome the contribution the NAO have made to informing the ongoing development of take-up strategies and the Pension Service more generally. Our strategies focus on overcoming the barriers to take up and one of our key mechanisms for driving take up is the Pension Service, a new customer focused organisation dedicated to the needs of pensioners. This provides a major opportunity to further enhance the quality of our customer service by actively promoting take up. In addition to processing pension entitlements, staff will be trained to identify possible entitlement to other benefits such as housing benefit and attendance allowance. Local service staff in particular will have a significant role in encouraging take up in local communities, and work in partnership with organisations that deal with older people, as the NAO proposes.
We have introduced a range of initiatives designed to encourage take up activity among pensioners: for the minimum income guarantee (MIG) we have undertaken a national advertising campaign, which resulted in almost an additional 140,000 claims with an average gain of £20 per week; reduced the claim form from 40 to 10 pages; introduced a MIG specific leaflet, and we are identifying potential beneficiaries through key events, such as claiming retirement pension.
A key priority, for both Government and the Pension Service is the successful take up of the new pension credit which will enhance and replace the MIG. It has been specifically designed to be easy for pensioners to claim and to be less intrusive. The weekly means test will be abolished for the over 65s and be replaced by a 915W statement of their circumstances every five years. Capital rules will be relaxed and the upper capital limit abolished.
In addition we have taken this opportunity to align the eligibility rules for housing benefit and council tax benefit with pension credit. DWP staff can now verify information on behalf of the local authority and we will be introducing legislation shortly that will enable local authority staff to do the same for DWP. This means pensioners will in time only need to report their changes in circumstances to one organisation (unless tenancy or dependant related). We are also removing the need for pensioners to re-claim housing benefit every 12 months. We will cut out duplicate claim forms so from April 2003, it will be necessary to complete just one housing and council tax benefit form. These changes are a significant step to simplifying the process and we are examining the scope for introducing further simplifications over the next few years.
Our take up plan for pension credit is extensive and makes use of a range of channels. We will transfer existing MIG recipients to pension credit, ready for payments to be made from October 2003; write to all pensioners not already receiving MIG by June 2004 to alert them to possible pension credit entitlement, supported by a national publicity campaign; work with local partners to help support the communications to pensioners, and tailor marketing and communications activity accordingly. We are setting a demanding PSA target to be paying pension credit to at least 3 million pensioner households by 2006.
With attendance allowance and disability living allowance (AA/DLA), we are trialling new claim forms to significantly improve the way claims are made. Both claim forms were reduced from 44 pages to 34 in 2001 and we are currently trialling a shorter attendance allowance 16 page form. We are also developing a new claiming process for DLA for working age customers. First tests of the new claim pack started on 26 November. The claim form will be personalised and be the minimum size necessary for that individual's needs. If successful this approach will be extended to pensioners.
We have accepted the NAO's recommendations for making further progress. This demonstrates the importance that the Department attaches to tackling pensioner poverty.
Table 1—pension entitlement assuming the fund remains in equities in all years Year started contributing Retire at end of year Years of contribution Lump sum built up (cash terms) (£) Lump sum in 2000 earnings terms (£) Annuity rate in last year of contribution (percentage) Pension at retirement (nominal terms, weekly) (£) Pension at retirement (2001 earnings terms, weekly) (£) 1956 1986 31 17,681 38,694 14.1 48 105 1957 1987 31 21,066 42,786 14.0 57 115 1958 1988 31 23,845 44,503 13.7 63 117 1959 1989 31 25,578 43,792 14.0 69 118 1960 1990 31 27,866 43,460 15.2 82 127 1961 1991 31 34,243 49,608 14.6 96 139 1962 1992 31 41,169 56,297 13.2 105 143 1963 1993 31 53,666 71,268 11.7 121 161 1964 1994 31 47,497 60,865 11.6 106 135 1965 1995 31 57,034 70,893 11.3 124 154 1966 1996 31 60,718 72,850 11.0 129 154