Select Committee on Deregulation and Regulatory Reform Eighth Report


Further information provided by the Department for Work and Pensions

Proposal for the Regulatory Reform (Carer's Allowance) Order 2002

Oral Hearing 5 March 2002

1.    Points were raised in the course of the Oral Hearing on 5th March. The purpose of this Note is to briefly address these issues in order to assist the Committee in their deliberations.

Social Security Advisory Committee (SSAC)

2.    Two main points were made.

3.    Extending Transitional Protection(TP) to those customers aged 45 and over at the date of the change of the law.

    The Government's proposals seek to provide transitional protection for those customers entitled to ICA who are aged 65 or over at the date of change. This would preserve their right to retain entitlement to ICA even if they subsequently cease to meet one or both of two of the conditions of entitlement to the benefit (fulfilling the caring condition, and undertaking employment at rates above the permitted earnings limit).

4.    The purpose behind the inclusion of the concession in the original 1976 rules for Invalid Care Allowance (ICA) has been explained in the 17 December 2001 Statement to the Committee. The alternative income protection now available to carers was also explained in that Statement and in my letter to the Committee dated 8 February.

5.    It is also worth reiterating that s70(6) of the Contribution and Benefits Act applies only to claimants who establish entitlement to ICA under the age of 65, and would not (without further changes to the 1992 Act) apply to those carers over the age of 65 who will be able to claim for the first time under the proposals. This would create a cliff-edge effect whereby new claimants aged 64 and 65 respectively would be subject to different basic conditions of entitlement. At the Oral Hearing, Mr Pike asked whether the solution was therefore to make the necessary changes in order to ensure that the concession was available to over 65s as well. In response, Charles Ramsden suggested that Ministers would be likely to see this as not only maintaining, but actually extending an arrangement, the policy basis for which had disappeared over time: in practice, creating further anomalies rather than trying to close them down over time.

6.    In practice most carers over 65 do not receive ICA as they receive Retirement Pension instead. Only those with no pension, or a low rate of pension will receive ICA, often small amounts as a top-up to a reduced rate pension. Entitlement to ICA brings access to carer premium in Income Support, but there are already rules within the income related benefits which prevent payment of carer premium in cases where there is entitlement to ICA but it is not payable, (because RP overlaps) and the disabled person dies or loses their qualifying benefit.

7.    The Advisory Committee have approached this problem by proposing a considerable extension of transitional protection, to all current recipients aged 45 or over. As I sought to explain at the Hearing, this approach would benefit only a very few carers. This is because transitional protection attaches to the claim not the person. When the claim ends, the protection ends. If a new claim is made, protection cannot be re-awarded. The median length of an ICA award is around 3.5 years: hence the vast majority of 45 year old carers would not still be carers at age 65. Even for those with long term caring responsibilities, who are still entitled to ICA at 65, the concession would only apply to those who ceased caring, and had no or limited pension entitlement, or if on low income, ceased caring for some other reason than death of disabled person (or loss of qualifying benefits). Clearly, long-term protection arrangements are very difficult to administer in situations like this, where there is no way of knowing exactly which claims (let alone which claimants) will actually require the protection at some future date. Every extant claim would have to be tracked against a need which might arise up to 20 years in the future.

8.    Finally, I should add that extending the protection to benefit (in the event) very small numbers of carers would maintain the differential and anomalous treatment of two groups of carers for a further 20 years - those claiming ICA after the age of 65 and some (but not all) of those aged under 65 at the date of change in the law. This would be difficult to reconcile with Ministers' wish to achieve as equitable and fair treatment as possible for all claimants.

9.    Eight week extension period

    The policy intention behind the extension of entitlement to ICA for 8 weeks is to reduce pressure on vulnerable carers faced with decisions about their future on the death of the disabled person - a period which may well be distressing for them, and during which they may naturally find difficulty in adjusting quickly to their new circumstances, including (as it may be) the need to consider re-entering employment. Essentially, the Government's proposal is that the other conditions of entitlement remain unchanged throughout the eight week period. This means that conditions affecting entitlement such as residence and presence, gainful employment, full-time study etc. will still apply, as will the overlapping benefits rules (common to many benefits across the benefits system).

10.  To relax other conditions during the 8-week period, as the Advisory Committee suggests, would require extensive further changes to primary legislation (with associated funding), but without assisting a key policy intention behind the package as a whole, namely to help the most vulnerable carers - those of pensionable age, of lower income, those combining work and active caring and those having to make difficult decisions following bereavement.

11.  The proposals will allow carers to have choices about the timing of their return to work, taking up study etc. It is surely right that income gained thereby is treated in the normal way.

The Deregulation and Regulatory Reform Committee

12.  Programme cost of the concession

    We were asked by the Committee what the savings to Government would be through the removal of s.70(6). The amount involved is both small and difficult to calculate, (certainly it has not been calculated in terms of a saving to Government), but working on our existing projection of about 230 people a year who benefit from s.70(6), we estimate that the current cost to government of the concession does not exceed £500,000 pa.

13.  Administrative cost of the concession at present

    We also undertook to let the Committee know the administrative cost of retaining the concession in its current form. Having now looked into this issue we believe that the administration involved in maintaining the concession is in fact less than that would be the case if it were removed. This is because a system where continued entitlement to a benefit no longer depends upon the recipient continuing to meet key conditions off entitlement requires little in the way of clerical case management or review.


15.  The withdrawal of the concession affects no-one's benefit at the point of change. No-one will have benefit withdrawn as a result of the proposals. All that will happen is that future carers reaching 65 will have to meet the conditions of entitlement, as those under 65 do now. All, rather than some, carers whose caring duties end will have their entitlement discontinued. Ministers are also satisfied that sufficient alternative means of financial support exist to prevent hardship.

16.  The question of proportionality remains at the heart of this process. Ministers' proposals reflect the conviction that burdens lifted by the removal of the age barrier, so that the rules for the benefit operate equally throughout for all customers, vastly outweigh those imposed by the withdrawal of the concession and that the package as a whole helps very many people facing caring responsibilities at a later age, on lower incomes, and those affected by bereavement.

previous page contents next page

House of Commons home page Parliament home page House of Lords home page search page enquiries index

© Parliamentary copyright 2002
Prepared 15 March 2002