State Pension (Hansard, 6 May 2004)

§ Mr. Laws
To ask the Secretary of State for Work and Pensions if he will estimate the cost, net of savings in means-tested benefits and additional tax revenues, of paying a full basic state pension to each individual(a) regardless of contribution record and (b) on the current system of entitlement at the rate of the guarantee credit, from the age of 80 years; and if he will estimate in each case the cost in each of the following four years on the assumption that the pension was then indexed to earnings. [168860]

§ Malcolm Wicks
The information is not available in the format requested. However, such information as is available is in the table.

£ billion

(a) Net cost of guarantee level basic state pension paid to those over 80 regardless of contribution record (b) Net cost of guarantee level basic state pension paid to those over 80 on current system of entitlements

2005–06 2.4 2.0

2006–07 2.6 2.1

2007–08 2.8 2.2

2008–09 2.9 2.4

Notes:

1. Figures are for Great Britain in 2004–05 price terms, rounded to the nearest £100 million. It is assumed the change comes into effect from April 2005 and basic state pension is up-rated in line with earnings thereafter. It is assumed that part (a) would not apply to those overseas, and so for consistency, part (b) also does not include any changes to the state pensions of those who are overseas.

2. Gross costs are estimated by the Government Actuary's Department and are consistent with Budget 2004 assumptions and use 2002-based population projections.

3. For part (a) it is assumed that for those over 80 the basic state pension has been increased to the guarantee credit rate, any additional pension is then added to the lull basic state pension.

4. In addition, no allowances are made for couples, and individuals aged over 80 have been assumed to receive basic state pension at the single rate of the guarantee credit, including those previously receiving no basic state pension through their own contributions.

5. For part (b) for those over 80, the maximum rate of category A basic state pension is raised to the level of the guarantee credit and those receiving less than the maximum category A basic state pension and other categories of basic state pension will receive an increased pension according to the rules of the current system.

6. Income related benefit offsets are calculated using the DWP policy simulation model and April 2004 benefit rates. It is assumed that the savings credit is left unchanged from the existing system and the current rules apply. Consistent w ith previous answers it is assumed that the offset for the first year will remain constant for subsequent years.

7. Additional income tax revenue is estimated by the Inland Revenue using 2004 tax rates. The income tax estimates for 2004–05 to 2006–07 are based on the 2001–02 Survey of Personal Incomes and are projected in line wish March 2004 Budget assumptions. For illustrative purposes, it is assumed income tax revenue will be a fixed percentage of the gross cost for this option in 2007–08 and 2008–09.

1786W

§ Mr. Willetts
To ask the Secretary of State for Work and Pensions how many(a) divorced and (b) widowed people who have made a claim for state retirement pension have yet to receive it; and how long they have been waiting in each case. [167336]

§ Malcolm Wicks
The number of claims to state pension from divorced and widowed customers who have yet to receive their award, as at 21 April 2004, is broken down as follows:

Number

Divorce 4,349

Widowed 1,083

Total 5,432

Information on how long they have been waiting in each case can be provided only at a disproportionate cost.

		£ billion
	(a) Net cost of guarantee level basic state pension paid to those over 80 regardless of contribution record	(b) Net cost of guarantee level basic state pension paid to those over 80 on current system of entitlements
2005–06	2.4	2.0
2006–07	2.6	2.1
2007–08	2.8	2.2
2008–09	2.9	2.4
Notes:
1. Figures are for Great Britain in 2004–05 price terms, rounded to the nearest £100 million. It is assumed the change comes into effect from April 2005 and basic state pension is up-rated in line with earnings thereafter. It is assumed that part (a) would not apply to those overseas, and so for consistency, part (b) also does not include any changes to the state pensions of those who are overseas.
2. Gross costs are estimated by the Government Actuary's Department and are consistent with Budget 2004 assumptions and use 2002-based population projections.
3. For part (a) it is assumed that for those over 80 the basic state pension has been increased to the guarantee credit rate, any additional pension is then added to the lull basic state pension.
4. In addition, no allowances are made for couples, and individuals aged over 80 have been assumed to receive basic state pension at the single rate of the guarantee credit, including those previously receiving no basic state pension through their own contributions.
5. For part (b) for those over 80, the maximum rate of category A basic state pension is raised to the level of the guarantee credit and those receiving less than the maximum category A basic state pension and other categories of basic state pension will receive an increased pension according to the rules of the current system.
6. Income related benefit offsets are calculated using the DWP policy simulation model and April 2004 benefit rates. It is assumed that the savings credit is left unchanged from the existing system and the current rules apply. Consistent w ith previous answers it is assumed that the offset for the first year will remain constant for subsequent years.
7. Additional income tax revenue is estimated by the Inland Revenue using 2004 tax rates. The income tax estimates for 2004–05 to 2006–07 are based on the 2001–02 Survey of Personal Incomes and are projected in line wish March 2004 Budget assumptions. For illustrative purposes, it is assumed income tax revenue will be a fixed percentage of the gross cost for this option in 2007–08 and 2008–09.