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Lord Higgins: My Lords, before the noble Baroness sits down, perhaps I may try to focus my point. Will any information be transferred from the Inland Revenue to other government departments which at the moment is subject to the control that it should be transferred to another government department only above a certain level of seniority in the Civil Service?

Baroness Hollis of Heigham: My Lords, without writing to the noble Lord I cannot tell him about the level of seniority. My understanding is that there will be no additional flow of information from the Inland Revenue to other government departments, other than that necessary for the purpose of this Bill; that is, the same flow of information that the DSS would have used with local authorities. That was set up by the previous administration, of whom the noble Lord was a supporter.

The one exception to that of which I am aware, which again will be covered by primary legislation through the welfare reform Bill, is the right of the Child Support Agency, as a last resort, to have access to Inland Revenue records of the self-employed where they are apparently deliberately failing to comply with their duties of child support. That is the only instance that I can bring to mind.

Apart from that, the noble Lord's fears are groundless. He is right to raise these questions, but all proper protections are in place and the Inland Revenue will have only such powers as are necessary for it to carry out its appropriate duties. They are built on the powers that currently exist for the DSS.

Lord Higgins: My Lords, I am grateful to the noble Baroness. I still have a feeling that there is a point here that we ought to pursue. However, I look forward to seeing what the noble Baroness has to say in writing and we can take it from there. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 30 and 31 not moved.]

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Clause 14 [Persons qualifying for disabled person's tax credit]:

Baroness Hollis of Heigham moved Amendment No. 32:


Leave out Clause 14 and insert the following new clause--

PERSONS QUALIFYING FOR DISABLED PERSON'S TAX CREDIT

(" .--(1) Subject to subsection (6) below, section 129 of the Social Security Contributions and Benefits Act 1992 (disabled person's tax credit) and section 128 of the Social Security Contributions and Benefits (Northern Ireland) Act 1992 (equivalent provision for Northern Ireland) shall be amended in accordance with subsections (2) to (5) below.
(2) In subsection (1), for "or (2A)" there shall be substituted ", (2A) or (2C)".
(3) In subsection (2)(a), for "56 days" there shall be substituted "182 days".
(4) After subsection (2B) there shall be inserted the following subsections--
"(2C) A person qualifies under this subsection if--
(a) the condition mentioned in subsection (2D) below is satisfied;
(b) a medical practitioner (within the meaning of the Administration Act) certifies, not more than 14 days before the date when the claim for disabled person's tax credit is made--
(i) that in his opinion the person will continue to have the disability in question for a period of at least six months; or
(ii) that in his opinion the person will continue to have that disability for the remainder of his life; and
(c) the level of the person's expected earnings is lower, by at least the required amount, than it would have been if he had not had the disability.
(2D) The condition is that there are 140 qualifying days, the last falling within the period of 56 days immediately preceding the date when the claim for disabled person's tax credit is made, which are days in respect of which--
(a) statutory sick pay has been payable to the person;
(b) the lower rate of short-term incapacity benefit has been payable to him;
(c) income support has been payable to him on grounds of incapacity; or
(d) earnings have been credited to him under regulations made under section 22(5) above.
(2E) For the purposes of subsections (2C) and (2D) above--
(a) the required amount, in relation to a person's expected earnings, is--
(i) 20 per cent of what those earnings would have been if he had not had the disability; or
(ii) if the amount given by sub-paragraph (i) above is less than the prescribed amount, the prescribed amount;
(b) qualifying days are days forming part of a single period of incapacity for work within the meaning of Part XI of this Act; and

24 May 1999 : Column 755


(c) income support is payable to a person on grounds of incapacity if and only if he satisfies the condition in section 124(1)(e) above by virtue of being a person who--
(i) is, or is treated as, incapable of work for any purposes of this Act; or
(ii) is treated as capable of work by virtue of regulations under section 171E below.
(2F) Sections 3 and 112 above shall apply as if this section were included in Parts I to V of this Act."
(5) In subsection (8), after "allowance" there shall be substituted ", or the level of a person's expected earnings,".
(6) In section 128(2E)(c) of the Social Security Contributions and Benefits (Northern Ireland) Act 1992, as inserted by subsection (4) above, for "124(1)(e)" there shall be substituted "123(1)(e)" and for "171E" there shall be substituted "167E".
(7) In section 11(3)(b) of the Social Security Administration Act 1992 (repeat claims), for the words from "he" to "that paragraph" there shall be substituted--
"(i) he qualified under subsection (2) of section 129 of the Contributions and Benefits Act by virtue of paragraph (a) of that subsection, or of there being payable to him a benefit under an enactment having effect in Northern Ireland and corresponding to a benefit mentioned in that paragraph; or
(ii) he qualified under subsection (2C) of that section or of section 128 of the Northern Ireland Contributions and Benefits Act,".
(8) In section 9(3)(b) of the Social Security Administration (Northern Ireland) Act 1992 (corresponding provision for Northern Ireland), for the words from "he" to "that paragraph" there shall be substituted--
"(i) he qualified under subsection (2) of section 128 of the Contributions and Benefits Act by virtue of paragraph (a) of that subsection, or of there being payable to him a benefit under an enactment having effect in Great Britain and corresponding to a benefit mentioned in that paragraph; or
(ii) he qualified under subsection (2C) of that section or of section 129 of the Great Britain Contributions and Benefits Act,".
(9) This section, except subsection (3) above (and subsection (1) above so far as relating to that subsection), applies to claims made, or treated as made, on or after 1st October 2000.")

The noble Baroness said: My Lords, I am delighted to move this amendment and hope that noble Lords share my pleasure. I would find it graceless if they did not.

This new clause will enable more disabled people who want to work to do so. It provides the legislative underpinning to deliver the policy announced by the Chancellor in his Budget. Like the original Clause 14, this new clause builds on the existing DWA rules by giving people moving off various out-of-work incapacity benefits 182 days--six months--instead of 56 days in which to find a job and apply for DPTC. The clause also introduces a new fast-track gateway to DPTC to help people who become ill or disabled while working.

One of the valid criticisms regularly made to us by disability organisations is that disabled people actually had to drop out of work in order to acquire the qualifying benefit to obtain DWA if they should

24 May 1999 : Column 756

subsequently find work. The process of dropping out of work meant that they lost the employer who alone was likely to keep them in work while they were disabled. It is that specific problem, which we all recognise, which the new clause is designed to address.

The fast-track gateway will be an additional route to DPTC. The present qualifying conditions will remain in place for people who, for example, are in receipt of DLA or who want to move into work after being in receipt of out-of-work incapacity or disability benefits.

I remind your Lordships that to receive DWA at the moment, a person must either be in receipt of one of a range of incapacity or disability benefits, such as DLA, at the time of the claim, and must have been receiving certain benefits within a specified period prior to the claim--for example, a higher rate of short-term incapacity benefit.

Those qualifying benefit rules, as I am sure your Lordships will know--certainly, the noble Lord, Lord Swinfen, will know--do not do enough to help people who become disabled while they are in work. As those people have never been disabled before, they have never been in receipt of any of the out-of-work disability or incapacity benefits. Their disability may not be severe enough for them to qualify for DLA, so the only option is for them to drop out of work in order to requalify in order to get access to DPTC. As a result they lose their jobs and employers lose the experience and expertise of a valued employee. The evidence shows that people who become disabled while working are most likely to find work with their existing employer, and if he does not employ them no one else is likely to. The longer someone is out of the labour market, the less likely they are to return to it.

It is to pick up a problem with DWA that we are introducing this clause in order to produce a fast-track gateway to DPTC--to make it financially possible for newly disabled people to stay in work even if, because of their disability, they either have to move to a less demanding (and therefore less well paid) job or need to reduce their working hours in their existing job.

Let me now explain how the fast-track gateway will work, as set out in the new clause. From October 2000 a person will be able to apply for DPTC if he/she meets the following conditions. The first is that he or she has received, for 140 days, statutory sick pay, short-term incapacity benefit paid at the lower rate, income support paid on grounds of incapacity, national insurance credits only or occupational sick pay. Linked periods of incapacity will count as long as together they add up to 140 days. The second is that he or she has a condition which puts him/her at a disadvantage in getting a job. The third is that a medical practitioner certifies that the illness or disability will last for at least six months, or for the rest of the applicant's life if that is likely to be shorter than six months. The final condition is that on returning to work the applicant will receive earnings at least 20 per cent less than would have been the case if there had been no disability.

Once a person has made a successful initial application for DPTC, he or she will of course be able to make a repeat application if the illness or disability

24 May 1999 : Column 757

continues at the end of the 26-week award period. Subsection (7) of the new clause amends Section 11(3)(b) of the Social Security Administration Act to ensure that the conditions which a fast-track gateway person has to meet on making a repeat application will be exactly the same as those affecting other repeat applications. In other words, the requirement for a 20 per cent drop in earnings will apply only at the time of the initial fast-track gateway application. After that, successful fast-track applicants for the DPTC will be on all fours with those who started on DPTC via the qualifying benefit route.

The idea of the fast-track gateway emerged from informal discussions between the Government and the disability lobby on the problems faced by people who become disabled while in work. The Chancellor announced the fast track in outline in his pre-Budget report in November 1998. A formal consultation followed, and the proposals were warmly welcomed by the disability lobby, whose suggestions for improvements have been reflected in the final design. The policy was finally announced in the Chancellor's Budget in March this year.

Since then the Government have gone further in addressing the needs of disabled people. As your Lordships will be aware, my right honourable friend the Paymaster General announced on 17th May that from October 2000 the WFTC will include an additional premium worth £21.90 a week for each disabled child in a family receiving WFTC. This additional premium is already payable under DWA and will continue under DPTC.

At the same time the Paymaster General also announced that the Government are now considering widening the range of eligible childcare for the childcare tax credit to cover certain types of paid care provided for disabled children in their own home. The Paymaster General said that the Government would be consulting interested organisations over the next few months to enable detailed proposals to be developed.

These were all measures that were raised in your Lordships' House at Second Reading. They were all raised in discussions with the Disability Benefits Forum and other disability organisations before the Bill came to this House.

I am absolutely delighted about these three important measures to help disabled people: the changes to the fast-track gateway; the additional disability premium worth £21.90 for every disabled child of a WFTC family; and being able to care for a disabled child in their own home.

This clause will provide much-needed support for people who have the misfortune to become long-term sick or disabled while they are working. Rather than giving up work altogether and claiming out-of-work benefits, such people will be able to stay in work, even though it may be work of a lesser amount in nature or shorter hours on reduced earnings, and have their income topped up by DPTC. In other words, DPTC for the first time will be doing what we have longed for DWA to do but which it has failed to do, which is to be a partial capacity benefit--the old alchemist's stone that we are all searching for.

24 May 1999 : Column 758

In view of the warm welcome given to this and other measures by groups representing disabled people, I hope that noble Lords will enthusiastically support the new clause. I beg to move.

10.45 p.m.

Lord Swinfen: My Lords, I welcome this amendment and shall not go into great detail about it at this time of night. However, I have one query. What will be new subsection (4)(2C)(c) says that a person qualifies if,


    "the level of the person's expected earnings is lower, by at least the required amount, than it would have been if he had not had the disability". I have made a note beside that wording, which reads, "Who says?" If the person who has the disability has been working on piece-rate, the answer is quite obvious because you can see the amount by which his work has slowed down and that he is not able to produce as much. However, that is not the case in many jobs. I just wonder how you judge whether a person's ability to earn has decreased as a result of the disability, because that will vary. I have in mind the difference between a 19 per cent loss of earnings and a 21 per cent loss of earnings. It is easy to work out the figures, but it is the actual earning power that concerns me. How is that to be judged?


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