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The Earl of Buckinghamshire: My Lords, I thank my noble friend for his reply to this crucial amendment. I wish him all success in his consultations with so many different bodies, and I hope that they come up with one answer. On that basis, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Lucas moved Amendment No. 183:

Page 65, line 27, leave out ("solvency") and insert ("funding").

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The noble Lord said: My Lords, this amendment was spoken to with Amendment No. 103. I beg to move.

On Question, amendment agreed to.

5.15 p.m.

Baroness Hollis of Heigham moved Amendment No. 184:

After Clause 113, insert the following new clause:

Entitlement to share in occupational pension

(".—(1) If a resident of residential accommodation (other than a temporary resident) being a member of an occupational pension scheme, has a spouse (referred to in this section as "the remaining spouse") living other than in residential accommodation, the remaining spouse shall be entitled on application to the trustees of the scheme to receive one-half of the gross occupational pension which the resident would, apart from this section, be entitled to receive.
(2) Any payment made to the remaining spouse under subsection (1) of this section shall not be treated as the resident's income but shall be treated as the remaining spouse's income for all purposes.
(3) In this section—
"residential accommodation" means either accommodation provided under Part III of the National Assistance Act 1948 or accommodation in a nursing home or residential care home as defined in Regulation 19 of the Income Support (General) Regulations 1987 if such accommodation is not provided under Part III of the National Assistance Act 1948;
"resident" means a person provided with residential accommodation;
"temporary resident" has the same meaning as in the National Assistance (Assessment of Resources) Regulations 1992; and
"gross occupational pension" means the amount of occupational pension to which the resident is entitled before deducting any income tax which would, apart from this section, be payable on that pension.").

The noble Baroness said: My Lords, this amendment relates to the problems that face more and more elderly people who need to go into residential care. In moving Amendment No. 184, which deals with the treatment of the occupational pension in that situation, I should like to speak also to Amendment No. 195, which relates to the state pension in that situation.

Both amendments seek to respond to the distressing situation where one partner—usually the husband—goes into long-term residential care, possibly with Alzheimer's disease. Unless the husband has a very generous occupational pension, all his occupational pension will be taken to pay for his nursing fees, leaving his wife without any of the pension. She is then reduced to the state pension. However, she receives only the dependent wife's pension, a category B pension of £35 per week—that is the point which Amendment No. 195 seeks to address—as though she were living in a household of two people, rather than the £57 per week that she would receive if she were unmarried, divorced or widowed. The wife is left nearly destitute twice over—by the loss of her share of the occupational pension (the point that is covered by Amendment No. 184) and by receiving only the dependent wife's state pension rather than the full pension that she might otherwise have received in her own right. As I have said, that point is covered by Amendment No. 195.

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Amendment No. 184 would allow such a wife, on application to the trustees, to retain half of the occupational pension, exactly as if she were widowed. Amendment No. 195 would allow such a wife to claim the full old age pension rather than the dependent wife's pension—again, exactly as if she were widowed.

In later old age, when health declines, husband and wife seek to care for each other. The burden often becomes too great. A spouse may have such poor physical health that he or she requires almost 24-hour nursing care with turning, toileting, feeding and general caring. The health of the other elderly spouse may then break down. The situation may be even worse if one party develops Alzheimer's. The spouse may struggle for years, seeking to provide care, until he or she can care no longer and residential care is inevitable. It is a very distressing time for both. The carer's health may be worn down. He or she will be exhausted. That spouse then finds that because of the cost of residential and nursing care, it is likely that the entire occupational pension (except for £13 per week) will be taken for the fees. The spouse—usually the wife—is left not only without half of the occupational pension on which she has been living, but also with a reduced state old age pension. From sharing with her husband an income of, say, £350 or £400 per week, the wife's income can fall to one-tenth of that—to, say, £35 per week. Yes, such a wife will be eligible for income support, but only if her savings amount to less than £8,000.

Everything that such a wife has done—her care for her husband which may have cost her her own health; their savings in the occupational pension for security in their old age; her modest cash savings of, say, £10,000—will be taken. She has lost her husband to Alzheimer's; she may have lost her health in caring for him, and she has lost virtually all of her income. It is not possible for her to live on £35 per week and keep up their home. However, if she sells the home to release some of the equity, half of it will be taken to pay the fees. She may not have enough to provide a home of her own. The situation is desperate.

I refer to Mrs. H. who is one of many who have written to me about this. She has cared for her husband, who has dementia, for the past 10 years. He is in a nursing home where the fees are well over £200 per week. The whole of his estate and all his occupational pension are used to pay for his care. Mrs. H. has no pension of her own—most elderly women do not have their own pension. She has had to apply for income support. Her social worker tried to argue that she should have a share of the occupational pension but, by law, she cannot. The wife, Mrs. H., asks:

    "How else am I to pay the bills? We both have some money saved [less than £8,000] but this won't cover the repairs needed to the house ... I am at my wits' end".

If I sound somewhat distressed about the matter I make no apology. These are some of the most distressing family situations that I have come across. She would be financially better off if he were dead. While he lingers, she is near destitute.

The Minister said in Committee that he had no evidence that there was a problem. Subsequently, he was kind enough to write to me to accept that, on the basis

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of the evidence submitted to him by the Alzheimer's Disease Society and Age Concern, there was. Some 10,000 men and 5,000 women with occupational pensions are in residential care. Many have left their spouses behind at home in deep financial distress.

The Government said that the amendments would not necessarily benefit everyone, and I agree. It is clear that many people will not have occupational pensions sufficiently large, when split, to lift their partners above income support. That is true; but the fact that we cannot help everyone is not an argument for not helping those whom we can, provided that unfairness does not result. The Minister has never claimed that the measure is unfair.

The Minister said that it would be unfair if the remaining spouse had a large pension of his or her own and large savings. In that case, under the liable relative proceedings the spouse could still be required to continue to contribute to spousal maintenance.

Finally, in Committee the Minister said that such an amendment was not necessary because local authorities already have the power or the discretion to waive part of the cost of residential fees. Two points arise. They may have the power but they almost never exercise it because, on the part of the local authority, not to take the whole of the husband's pension would be a voluntary forgoing of income. And that at a time when the financial situation for social services, given the pressure of care in the community, is already so tight that local authorities are not only abandoning discretionary services but are having a hard time maintaining the statutory services that they must. When local authorities are having to make an economic charge of £8 per hour for a home help, one cannot reasonably expect them voluntarily to forgo a discretionary charge.

In any case, the estimate for the income coming from these charges has been built into local authorities' standard spending assessments. The Government expect local authorities to raise that money whatever the cost to the families concerned. Therefore, they cannot forgo. The Alzheimer's Disease Society and Age Concern have trawled local authorities and discovered that virtually none can allow the spouse at home to keep more than, say, £5 or £10. The wife is left near destitute.

I hope that the Government will ask us to remit the amendment to them in order that they can consider it further. If not, I ask your Lordships whether it is reasonable, decent and just that a spouse who has cared for a partner in declining health and then loses him to Alzheimer's disease and to residential care, should then lose all the family income associated with that.

There is an alternative which is provided by Amendment No. 184. It is that in such circumstances the wife would have recourse to the trustees to receive that share of the pension that would be the equivalent of her being widowed. I hope that your Lordships will agree that that is a decent and humane way to proceed. I beg to move.

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