e-mail Paul Lewis on paul@deadline.demon.co.uk
The headlines are
but what do they mean in detail?
GUARANTEED INCOME
The Government promised on July 17 that it would 'guarantee' pensioners a minimum level of income from next April. In fact, the statement made in the House of Commons by the Secretary of State for Social Security Harriet Harman was at best misleading and at worst plain wrong. The situation was not helped when the press release issued by her Department, which was supposed to give all the details omitted from her speech, turned out to contain numerous errors - most of the figures in it were wrong and it took some time to get the correct ones confirmed. So what you read here is the first accurate summary of what older people will get.
Everyone aged 60 or more already has a guaranteed income from the state. It is called income support and, if your income falls below the levels which the Government thinks you need to live on, then income support should make up the difference. What the Government announced in July means two changes in the income support scheme
The new levels of income support or guaranteed minimum income - no-one can say which name will be used - are set out in the table. They will apply from April 1999. But the amounts are not as generous as they seem. The rate of income support goes up each April anyway to take account of inflation. The Government looks at how fast prices are rising in September and raises benefit rates seven months later. Because people on income support get most of their housing costs paid, the Government uses a special measure of inflation which excludes housing costs - called the Rossi index - to increase income support amounts. This index is usually less than the headline rate of inflation. For example, in April 1998 most benefits went up by 3.6pc but income support was increased by only 2.4pc.
This September the Government estimates that the Rossi index will show a rise of just 2pc, so next April income support would normally rise by that amount anyway, adding £1.40 a week to the rate for single people and about £2.40 for couples. However, the Government has decided to treble that increase, giving a further £3.15 a week for singles and £5.05 a week for couples on top of the increase for inflation they would have had anyway. The amounts the Government has promised are set out in the table.
Apart from the higher rates and a possible change of name to Guaranteed Minimum Income all the other rules of income support will remain. It will still be means-tested on your income and your savings. You will still have to fill in a long and complicated form. And if you get any extra income, your benefit will be reduced penny for penny.
The savings rules have always seemed particularly harsh and intrusive. Anyone with savings over £8000 will not get the guaranteed income just as they do not get income support. Savings of £3000 or less are ignored and so is the interest they earn. Anyone with savings between £3000 and £8000 has their benefit reduced on a sliding scale of £1 for each £250 over £3000. So someone with £8000 will lose £20, often more than enough to wipe out any entitlement to the new benefit at all.
Other people will also be excluded including nearly 300,000 older people who live in residential care or nursing homes. They will continue to lose all their income to pay the fees apart from a personal allowance of just £14.45 a week. And the 800,000 British pensioners who live abroad will not get the guaranteed income either - many of them live on just a few pounds a week. It does make you wonder who briefed Harriet Harman when she told the House of Commons that "all pensioners will have a guaranteed income of not less than £75 a week...pensioner couples are guaranteed a minimum income of £116.60 a week."
ENCOURAGING CLAIMS
As we have reported in Saga Magazine several times, at least a million pensioners do not claim the income support and other means-tested benefits they are entitled to. The Government has promised to so something about what Harriet Harman called "these forgotten pensioners [who] are mostly elderly and nearly all women". It will be appointing a team of personal advisers for pensioners who will try to find the people who could claim help from the state but do not do so. Over the next three years the Government plans to persuade about a third of those who do not claim to do so.
At the moment it is not clear how these advisers will work or what techniques are most successful in getting people to make claims. Many of the obvious things - like making the rules simpler or the forms less inquisitive about personal information - seem to have been ruled out.
WINTER FUEL PAYMENT
The Secretary of State said in the House of Commons on July 17 "Today I can announce...extra help with winter fuel payments for all pensioners." And it was almost true.
The Winter Fuel Payment scheme which began in 1997 is to be continued. The original scheme - which applied in winter 1997 and will be repeated in 1998 - provided a one off payment of £50 for each pensioner or couple who got income support and £20 for each other pensioner household. The scheme will cost nearly £500 million for the two years. For the next three years a similar amount is to be spent. But to spread it over three years rather than two, the payment to people on income support will be cut from £50 to £20. The amount paid to others will be frozen at £20 rather than increased with inflation. And around 500,000 pensioners in residential care and nursing homes will not be paid anything at all.
TRANSPORT
Deputy Prime Minister John Prescott announced as part of his share of the spending review that he would introduce a scheme to guarantee half price travel on local buses for all pensioners. At the moment local authorities are free to decide whether they offer any help with public transport costs for their older citizens. As a result there is a mixture of schemes. Some areas like London offer free travel on public transport to everyone over 60. Other areas offer nothing at all.
Under the new scheme every local authority would at least have to offer everyone over pension age (60 for a woman and 65 for a man) a pass which would allow them to travel at half the full fare. And local authorities would be free to offer something better if they chose to do so.
However, officials have told Saga Magazine that the new scheme will require legislation and they do not know when that can be put through Parliament. So the cheaper fares are unlikely to start before the year 2000 at the earliest. The cost of the new scheme is estimated at an extra £25 million a year on top what is already spent.
HEALTH
From April next year the fee for an eye-test is to be abolished for everyone aged 60 or more. There has been widespread concern that the fee - which averages around £15 - has put many older people off having their eyes tested and that diseases such as glaucoma have not been diagnosed early enough to be cured. Some people have gone blind as a result. If you have not had your eyes tested recently, it is an excellent idea to do so at once. The cost of the change is put at around £35 million a year.
Health Secretary Frank Dobson also announced extra money for social services departments. This money will, he said, 'mean better help for the elderly and carers. There will be new measures to allow tens of thousands of old people to live an independent life, where at present they end up trapped in nursing homes or hospitals."
However, no further details of how this money will be spent nor when it will start. are available. More details are promised later in the year.
September 1998
| GUARANTEED MINIMUM WEEKLY INCOME RATES FROM APRIL 1999 | ||||||
|---|---|---|---|---|---|---|
| Age | 60-74 | 75-79 | 80 or more | |||
| Single | Couple | Single | Couple | Single | Couple | |
| Income support 1998/99 | 70.45 | 109.35 | 72.70 | 112.55 | 77.55 | 117.90 |
| Guaranteed Minimum Income from April 1999 | 75.00 | 116.60 | 77.30 | 119.85 | 82.25 | 125.30 |
| Extra on top of today's income support | 4.55 | 7.25 | 4.60 | 7.30 | 4.70 | 7.40 |
| Extra on top of estimated rise for inflation | 3.15 | 5.05 | 3.15 | 5.05 | 3.15 | 5.05 |
e-mail Paul Lewis on paul@deadline.demon.co.uk