Select Committee on Work and Pensions Minutes of Evidence

Examination of Witnesses (Questions 40-59)




  40. I want to ask some questions about the complexity of the system. I was intrigued by something I read in Help the Aged's evidence about the DWP's own research about the newly-qualified pensioners being some of the most reluctant to claim. Did I get that right?
  (Mr Wilson) There is DWP research on the current batch of people who are entitled but not claiming. Then I went on to extend that thinking to look at the new types of people who are brought in to entitlement. There are two reasons to be pessimistic on take-up at that level. Firstly, these people, who by definition have more money, are more likely to have worked, have better work records and less experience of filling out forms for benefits, are also more likely to have myths and significant bad viewpoints of the DSS and the benefit system.

  41. You are suggesting a target of 90 per cent take-up within two years.
  (Mr Wilson) As a charity we believe it is completely unacceptable that a new flag ship benefit will not reach the people that it is aimed at because they are too isolated, they do not have English as a first language, or for many other reasons they cannot access this benefit, which is supposed to be about combatting poverty.

  42. Have you got any research that suggests it is possible?
  (Mr Wilson) No, we have not. It was merely a challenge to the ministers to come up with something.

Rob Marris

  43. There seem to be contradictions between what Mr Lishman said and what Mr Wilson said. I understood Mr Lishman to say one of the factors influencing broad take-up was the oldest pensioners, and you seem to be saying it is the newest pensioners who by definition are the younger pensioners.
  (Ms West) They are not necessarily.

  44. Am I seeing a contradiction that is not there?
  (Mr Wilson) I was talking about the `new pensioners' who are being brought newly into new entitlement for means-tested benefit. I agree entirely with what was said by Gordon that it is the oldest pensioners. Increasingly this benefit will bring in more of the oldest pensioners into the new entitlement.

Mr Stewart

  45. You have all complained in your submissions about the complexity of the Pension Credit. Would you agree with what Baroness Hollis said: "the pensioner does not have to do the calculating. The skill is in helping pensioners to know that there is an entitlement for them to apply for"?
  (Ms West) I think there is an element of that and clearly pensioners do not need to look at the legislation. I think if they did they would run a mile. It is also very important for a lot of older people to actually understand how their benefit is calculated because they worry about getting too little but they also worry about getting too much, that somebody has incorrectly given them money that they may have to repay. A lot of people do want to understand the calculation behind it. We are already getting people writing to us to say "can you explain exactly how this bit is going to work?" I think it is important that people not only understand or get a broad message that if you are in certain income groups it is worth claiming, but understand the process behind it. Also, although there will be some broad messages put out on the kind of income ranges, there will be people entitled to extra elements due to severe disability or housing costs and they will need to know that they may still be entitled even though their income is slightly higher than the standard level.
  (Mr Kohler) People need to know roughly that they are going to be entitled to a benefit before they pick up a phone and ask whether they are. I think that is a first hurdle, which we are somehow going to have to jump over if we are countenancing a system which is going to bring half our elderly population into an "asking" mode. And, of course, the situation is going to change year by year under the proposals for the Pension Credit, with more people becoming eligible each year as the indices move in different directions. I think this is where the complexity and the potential confusion in the public's mind will be a barrier to people asking their new friendly Pension Service for help in assessing their benefits.

  46. What would your organisations do to try and sell this message? We have heard a little bit about that earlier on today. Would you ditch some of the complexity or do you think the message in terms of advertising take-up should be done in a different way and through different media?
  (Mr Lishman) There are a number of different levels. The first level is to create a situation in which it is unlikely that an individual retired person is going to be living in poverty. That is about the level of the Basic State Pension and it is about a core attitude towards that, which is something this Committee has discussed in the past. Secondly, it is about transparency and clarity. It is about being able to say, "If I am in this position, I follow that course and then I understand that that will be the result." Thirdly, it is about the traditional take-up campaign—if you take Age Concern and Help the Aged—that we are heavily involved in. We are talking directly by telephone in the two organisations with some 600,000 older people every year. In my case, the national organisation is communicating with half a million people a year about benefits and our local Age Concerns are talking to over a million more. We are listening to and talking to people about those things all the time. If you want to persuade people to claim, you have to get over a series of hurdles that the evidence suggests is going to be extremely difficult to do. If you are to do that however, following Richard's point, the most important single element is independent advocacy. That is to say someone who will share the responsibility with someone when they put their signature on the end of a form, who will help them to understand what comes to them at the next stage and who will help them through that process so that they will be able to get the best out of it. There are a number of ways. I give credit to the ideas that the Pensions Agency are developing, with some of the things they are trying to do in conjunction with Consignia and so on. I do think historically the DWP has been less open and encouraging than many of us would like in involving organisations like ours, and many others, in that independent advocacy role and letting us deliver the results in that sort of way.

  47. Clearly there is a major job for non-statutory organisations in this and for statutory organisations —
  (Mr Lishman)—Welfare and benefits go together.

  48. And also on the way we approach advertising. The United States, for example, use milk carton advertising very successfully for missing children. Should we be looking more imaginatively at how we tell pensioners what their rights are?
  (Ms West) I think we should be looking at what can be done automatically—the idea that you do not have to go out and encourage people to claim, that you can identify them. One important area will be the Housing Benefit and Council Tax Benefit records. A lot of the extra people who will be entitled to the Pension Credit for the first time from October 2003 will have already given details of their income and savings to their local authority. Indeed, we know that there are a lot of people getting Housing Benefit who should be getting MIG now. There are various initiatives which are mainly trying to identify these people and target them with information. What we would like to see is a system where that information is fully shared so that if you give the details to the local authority you tick a box saying you also want to be considered for Pension Credit.

  49. There is a lot of sharing of software now between local authorities and the Department. I know there are areas where it has broken down but that seems to me a sensible way to try and develop this. You give information to one body; why can we not duplicate it to others?
  (Ms West) It is a Government aim but it has not become reality yet. It is a very important thing to work towards.

Rob Marris

  50. I wanted to raise another question on the administration, which I raised with both of you before. If 5.3 million pensioners are going to be potentially eligible for the Pension Credit, based on what you have said and looking at the Department for Work and Pensions administratively, is it going to be able to cope with the Pension Credit for another 5.3 million?
  (Mr Lishman) One of the things about creating a new Pensions Agency, completely restructuring it and going for a substantial investment in new software is that I am very glad I am not the Secretary of State a fortnight after the whole system comes into operation. What I am saying is neither we nor they know. You are asking about experience. We are moving into a very different field. The way the Pensions Agency will work is very different and there are risks and I think the experience we have all had in these areas would not necessarily lead us to be optimistic.

  51. How would you lessen those risks?
  (Mr Lishman) I think the biggest risk arises because of trying to do everything at the same time and keeping up all this pressure. It does not feel to me like good architecture, it does not feel to me like a carefully constructed wall. It feels to me like doing lots of different things in the hope that eventually if you do enough different things that you will have covered all the separate problems, and in view of the fact we are constructing a system of income maintenance in later life, that is no way to run a railway.
  (Mr Wilson) If you are asking questions of Ministers it might be interesting to ask them about the software, which is going to be absolutely crucial. They do not have a particularly good record on that issue. It would be interesting to find out how confident they are on that issue. There are lots of parallel reforms going on—the Pension Service being divorced from the rest of the system, new ways of staff working, a whole new payment method whereby a lot of pensioners will have to fill out a form to open a bank account over the next few years. They are attempting to do a lot at once when previously these kinds of big changes have been rare.
  (Mr Lishman) A very specific point might be one which this Committee will understand in covering both work and pensions in that with the new different agencies, combined with a Government commitment to smooth the transition between working in retirement, and having a less clear distinction, there are going to be a number of either overlap areas or areas where people may fall between the Working Life Agency and the Pensions Agency. There is another group of things there that are going to potentially create problems around that interface.
  (Mr Lynes) Could I just add that no government has ever before tried to means-test over five million pensioners. The chances of that going smoothly seem to be extremely remote.

  52. It is an ambitious Government, yes.
  (Mr Lishman) We would like them to succeed.


  53. You could say that with a bit more conviction!
  (Mr Lynes) Might I come back to the question of complexity about which we said quite a lot in our written submission. I personally feel very strongly about this because I have been involved in looking at social security legislation for roughly the last half century and I do not think I have ever come across anything quite as bad as clause 3 of this Bill. Clause 3, frankly, is incomprehensible.

  54. Remind us what clause 3 is.
  (Mr Lynes) Clause 3 is the one which purports to explain the savings credit. The Pension Credit consists of the guarantee credit and the savings credit. Clause 2 is the guarantee credit and clause 3 is the savings credit. It seems to me what is new about the Pension Credit is that the Government is introducing a system of what we used to call "disregards", in other words in working out your entitlement to MIG or Income Support, whatever you call it, you ignore a certain amount of people's incomes. So it is simply an integral part of the calculation of MIG that you work out how much people are entitled to and in doing that you ignore 60 per cent of certain types of income. What the Government has done, however, is to try to divide it into two different benefits. First of all, you get your guarantee credit and then you get something else which is called the savings credit, and what the savings credit actually is, is the difference between the amount that you would have got under the present system and the amount that you will get with the disregards. Trying to put that into a mathematical formula, as clause 3 does, gets you into the most ridiculous complexities and those complexities are completely unnecessary. All they needed to do was say in clause 2, which explains the guarantee credit, "in working out the guarantee credit we will ignore 60 per cent of certain parts of your income". We have suggested how this could be worded and we have got it into two sub-sections of clause 2 instead of eight sub-sections of clause 3. You may not think that our two sub-sections are a model of clarity but they are certainly a great deal clearer than clause 3. I really think it would be appalling if clause 3 found its way onto the statute book in its present form, or indeed at all. It is simply not necessary.

  Chairman: Thank you for drawing that to our attention.

Rob Marris

  55. I want to stick with the administration. I wonder whether this five-year rule on reassessment is going to help in terms of encouraging people to overcome their barriers to applying, on the basis that if they apply and have a result one way or the other, they know it is likely to hold good for five years unless their income declines. Is that going to assist with take-up in contra-distinction with something which might be done annually and people think they are going to have to do every year for the rest of their life?
  (Ms West) It is one of the features that people will only be assessed every five years and they will be able to have small increases in income and that will not mean that they will have to go and have it reassessed. The other side of it is that it will be important that people have regular information on what their benefit is going to be calculated on. To be honest, what is more likely to happen is people's income goes down over time (they spend their savings) rather than going up. We hear of people now who get into problems because they had a small extra amount of income and have an overpayment but generally pensioners' circumstances are quite stable. The important thing is picking out those who are perhaps entitled to more credit as the five-year period progresses.
  (Mr Lishman) This is one of those problems where the balance with work may arise. If people for instance earn a little money, there will then be a question about the interface between that assessment and particular people. So there is a group.
  (Ms West) We are not clear whether earnings will be one of the factors that you need to put forward, and that will make quite a big difference to people who are earning small amounts of money as to whether it is a very simple benefit to administer.

  56. Can I ask one final question on access routes to information. I suppose it is an administrative question. Mr Wilson referred earlier to ethnic minorities often having difficulty in accessing information. I was wondering about the telephone route. Mr Lishman said that half a million telephone calls are taken.
  (Mr Lishman) That is the two organisations together. Again that is related to benefits, there are others on other subjects.

  57. Do you think the telephone route of access for people of that age is user-friendly or not?
  (Mr Lishman) Sometimes for some people. Older people are the largest group in the population without a phone so you have got that particular group of people. There are problems. The whole operation of call centres and their friendliness to older people is something we have looked at. We have talked to people and we have been involved in training programmes, for instance people who are operating call centres. It can work, it can be friendly, it is about training and the purpose of that process and how you do it. Yes, it does have some useful elements to it. There are people it misses out and people who find it difficult to follow that route. One of the other points, talking about these groups, is that there are substantial groups of people suffering from a degree of sensory impairment, so people with sight loss or with hearing loss, which brings you into particular problems with the use of media other than a person talking to you.
  (Ms West) In looking at the positive things you can look at there is the necessity of ensuring that there are sufficient local Pension Service staff in each area. It is one of the issues we are talking to the DWP about in terms of the local service and how it might work in partnership with local organisations. We are concerned that there will not be enough DWP staff to be doing home visits and seeing face-to-face callers because that is intensive timewise and they are often the people who need a bit more time to go through forms.

  58. You are also obviously talking to them about translation services?
  (Ms West) There are telephone translation services that DWP uses but you would also need them on a local basis.

  59. I realise that. Are you talking to them about it?
  (Ms West) It is one of the issues that comes up in meetings we have. One of the things DWP is doing is research looking at older people and ethnic minorities and why they do not take up benefits, which is important.
  (Mr Kohler) It is part of the modern world that the telephone and PC and so forth are going to become increasingly the means of communication. Our older population is hopelessly disadvantaged in that respect for the moment. It is not this Committee's job to address that but it is the job of some committee somewhere to address that to make better levels of telephone and electronic communication available to our older population. I think my anxiety about the telephone system goes back to the complexity of the new arrangements which are being proposed. With the knock-on changes to Housing Benefit and Council Tax Benefit meaning that different threshold levels are part of the calculation, the way in which somebody is going to have to be able to describe their circumstances to an individual answering the phone, who is going to have to be intuitive about asking the right questions, makes me worry that this is not going to be an appropriate manner in which this particular reform can be implemented.
  (Mr Wilson) We are concerned about the quality of the training available to staff who work in the DWP call centres. They are on the very lowest grade of administrative assistants. They are supposed to be offering a service that is quite interactive and involves understanding the needs of older people. We feel that is not likely to happen at present, not when you have got these millions of calls having to be routed through in order to get the take-up levels that are needed. That is why the services that we offer have an added value compared to what the DWP offers.

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