HC Deb 04 March 2002 vol 381 cc16-7W
14. Mr. Dismore

To ask the Secretary of State for Work and Pensions if he will make a statement on deductions from pensions of pensioners admitted as in-patients to hospitals. [36342]

Mr. McCartney

I refer my hon. Friend to my answer of 25 February 2002,Official Report, column 778W, in which I said that as previously promised we have considered carefully the impact of the current rules which reduce certain benefits paid to pensioners and people of working age after six weeks of hospitalisation. The downrating of benefits preserves the principle that the state should not make double provision. It also recognises that a substantial number of people leave hospital before six weeks.

However, we also recognise that people have on-going financial commitments while in hospital, and although we consider the six week rule strikes a fair balance between what the state should provide financially and the provision individuals should make for themselves, we have nonetheless decided to extend the period before benefits are downrated by a further seven weeks to the 13th week stage. This will mean that people previously affected by the six week rule will be able to keep their benefits untouched if their period of stay in hospital is under 13 weeks.

We will introduce this change to coincide with the introduction of Pension Credit.

Mr. Burstow

To ask the Secretary of State for Work and Pensions what his policy is towards the incomes of pensioners while they are in long-term hospital care. [36350]

Mr. McCartney

I refer the hon. Member to my answer of 25 February 2002,Official Report, column 778W, in which I said that as previously promised we have considered carefully the impact of the current rules which reduce certain benefits paid to pensioners and people of working age after six weeks of hospitalisation. The downrating of benefits preserves the principle that the state should not make double provision. It also recognises that a substantial number of people leave hospital before six weeks.

However, we also recognise that people have ongoing financial commitments while in hospital, and although we consider the six week rule strikes a fair balance between what the state should provide financially and the provision individuals should make for themselves, we have nonetheless decided to extend the period before benefits are downrated by a further seven weeks to the 13th week stage. This will mean that people previously affected by the six week rule will be able to keep their benefits untouched if their period of stay in hospital is under 13 weeks. We will introduce this change to coincide with the introduction of Pension Credit.

We have also taken steps to substantially increase the income of all pensioners. For example, we have increased the basic pension above inflation, we have increased the winter fuel payments, we introduced free TV licences and we have increased the amount of the minimum income guarantee and brought more pensioners within its scope by raising the capital limits. When Pension Credit is introduced in 2003, 5.5 million pensioners will be better off and for the first time pensioners will be rewarded, not penalised, for saving. At the same time further increases are proposed—above inflation—to the pensioners' tax allowance. When the State Second Pension is introduced in April 2002 18 million people, including carers, long-term disabled and low to moderate earners, will benefit. This is a substantial package of measures. These are real increases which make all pensioners better off.

Mr. Boswell

To ask the Secretary of State for Work and Pensions how much will be raised in each full year from 2003 by the revised hospital downrating rules announced on 25 February; what proportion will be attributed severally to(a) retirement pensions and (b) other benefits; and how many (i) pensioners and (ii) recipients of other benefits he estimates will still be affected. [39440]

Mr. McCartney

There will be no money raised by the revised hospital downrating rules, to be brought in from October 2003. It will be delivered at a cost to Government of approximately £40 million.

We estimate that up to 5,000 claimants of retirement pension are affected by the 13 to 52 week hospital downrating rule at any point in time. 4,000 claimants of other benefits are also affected.

Notes:

1. All figures are 2001–02 price terms.

2. Some pensioners will have both retirement pension and pension credit. Therefore there is a small amount of overlap in the number of claimants of retirement pension that will still be downrated, and the number of people claiming other benefits that are down-rated. This overlap will not be more than 2,000 people at any point in time.

3. The figures are for all income related benefits and retirement pension.