| State Pension Credit Bill [Lords]
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Mr. Clappison: It has been a useful debate. I emphasise that it was a probing amendment. I beg to ask leave to withdraw the amendment. Amendment, by leave, withdrawn. Mr. Clappison: I beg to move amendment No. 35, in page 5, line 38, at end insert
The amendment would allow decisions on entitlement to credit or retirement provision to be changed if claimants had acted fraudulently or without the utmost good faith when making their claims. We shall come to the general question of fraud later, in a new clause. The amendment is designed to explore how decisions on income received, and the effect that that will have through the pension credit, could be revised in the circumstances outlined. We imagine that there is some mechanism whereby a decision can be revised if the applicant has behaved fraudulently, and Column Number: 169 we look to the Minister to say a few words on the subject. It might also be worth exploring whether decisions should be revised if the applicant may not have acted fraudulently but did not act with the utmost good faith.Mr. McCartney: Over the years, pensioners have put off claiming the help that they are entitled to because of the nature of the claims process. Claiming is sometimes seen as stigmatising. We do not want to debate that today, but clause 7 tries to deal in a practical way with those issues, which are real to older people, but to take account of them when developing a system that meets the taxpayer's need for the decision-making process to be secure. I realise that it is a probing amendment, but I do not want those taking part in this debate—even if only the hon. Gentleman and I are in the firing line—to think that we are accusing pensioners of fraud. Indeed, fraud among older people is comparatively rare. For example, for the 12 months to March 2001, only 3.2 per cent. of MIG cases were found to be engaged in fraud compared with 8.9 per cent. of income-based jobseeker's allowance cases. The principal types of fraud are incorrect declarations of capital and savings by claimants, and the new system will significantly reduce that error rate. Claimants will continue to receive benefits while living abroad or when on extended leave from the United Kingdom that has not been reported. Another fraud is incorrect declarations of benefit received and other sources of income, including occupational pensions. We are developing a strategy for measuring losses for fraud and error. Pension credit is a brand new benefit and it means that we can scrap the weekly means test. It is important to ensure that our strategy for measuring underlying losses for fraud and error is robust. None of us is interpreting the hon. Gentleman's intention in moving the amendment as anything other than honourable towards older people. He is attempting, rightly, to discover whether we have put effective arrangements in place to deal with it. Subsection 8 already provides the powers that he refers to in the amendment. The amendment, is therefore, redundant. Committee members will no doubt appreciate an explanation of why we seek those powers. It is a bit like following a string through a labyrinth, but here we go. We will have powers to revise pension credit decisions that have been based on a mistake or ignorance as to a material fact, including those that have arisen through fraud or misrepresentation. Those powers derive from section 9 of the Social Security Act 1998.
12.15 pmPension credit is included in the provisions of the 1998 Act by virtue of the consequential amendments contained in part 2 of schedule 1 of the Bill. In turn, overpayments that arise through fraud or misrepresentation are recoverable under section 71 of the Social Security Administration Act 1992. Pension credit is included in that provision by paragraph 10 of schedule 2 of the Bill. Happily, very few pensioners Column Number: 170 seek to defraud the taxpayer or obtain an overpayment deliberately. However, we recognise that, especially with the existing regime, the continuous requirement to report changes can cause pensioners to be overpaid inadvertently. Indeed, for that reason, some pensioners are put off claiming the MIG. We do not wish to brand decent, well-intentioned pensioners as fraudsters, and another major positive effect of the assessed income period will be that changes in income will no longer have to be reported. Where cases of fraud or misrepresentation do occur, I hope that I have satisfied the hon. Gentleman that the Bill already provides for the powers that he seeks in his amendment, which I ask him to withdraw.Mr. Clappison: I am grateful to the Minister for his explanation. We have drawn out, first, that the powers exist to revise such decisions and, secondly, where those powers lie. For those of us who do not have section 71 of the Social Security Administration Act 1992 at our fingertips, the Minister's response is helpful. I appreciate the context in which the Minister has set the debate. I agree with him if he is saying that a balance needs to be struck in these matters, and that one should not introduce unwarranted measures that may alarm pensioners or put them off claiming. Pensioners understand as well as anyone what fraud means, and the amendment is designed to bear down on fraud. Fraud requires a dishonest intention to defraud, and I am sure that pensioners feel as strongly as everyone else feels about those who fraudulently divert the money of honest taxpayers into their own pockets. We shall have a wider debate later about tackling fraud. I agree with the Minister that benefit fraud is less prevalent among older people, but it does exist. However, having drawn out from the Minister which part of the Bill contains the power to which he refers—clause 7(8), although the power is not spelt out in the clause—I beg to ask leave to withdraw the amendment. Amendment, by leave, withdrawn. Clause 7 ordered to stand part of the Bill.
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