This piece first appeared in The Daily Telegraph on 3 February  2001
The text here may not be identical to the published text

Pensioners grow tired of muddling through

Pages of nonsense to top up your income

The Government is to stop asking people over 60 if they are pregnant when they claim a means-tested top-up to their pension. The question, along with around 200 others, will go when a new claim form for the Government’s minimum income guarantee comes into use later in the year. The current 40 page form will be reduced to just 10 pages as the spirit of Sir Humphrey is expurgated.

No longer will retired people be asked "Are you involved in a trade dispute?" They won’t have to puzzle how to answer "Have you ever claimed invalid care allowance? Tick ‘Yes’ even if you were not paid any" or scratch their heads over "Do you or your partner share the rent or mortgage for the place where you live with anyone else. Tick ‘No’ if you or your partner just share with each other." They will not have to look aghast at "Please tell us in part 14 if you want to claim for more than 7 children", "Are you or your partner pregnant" or "Do not tell us about people who just share a toilet with you". They will no longer be insulted by explanations such as "Does anyone owe you any money?…This might be for things like money lent to someone" or baffled by "Do you or your partner have a mortgage…is it secured on your home?" or rush fruitlessly to their dictionary over "Do you or your partner get any payments from a creditor insurance policy?". Finally, after struggling through 320 questions and 37 pages, they are asked "Have you answered all the questions on the form that apply to you? If ‘No’ please tell us why."

Recent figures show that between a fifth and a third of the people aged over 60 who are entitled to the minimum income guarantee do not claim it

Perhaps the surprising thing is that around 1.5 million people have ploughed through this nonsense to get the extra money, which currently tops up their income to £78.45 a week (£121.95 for a couple). But figures issued before Christmas show that between a fifth and a third of the people over 60 who are entitled to the minimum income guarantee do not claim it. Last summer the Government launched a major advertising campaign to encourage them to do so. But so far it has been an expensive flop. Although 800,000 people have called a special help line only 143,000 have actually had a claim processed and of those, only 62,500 have been successful. That represents only about one in eight of the 500,000 people over 60 who the Government estimates could claim minimum income guarantee but do not do so.

The Government spent £15 million on the campaign – including £4 million on advertising, £1.2 million on writing to more than a million people, and £4 million on what it calls ‘other expenditure’. The balance of nearly £6 million went on setting up and staffing the new telephone help line which takes people over 60 through the form and then sends them a completed, printed copy which they just have to sign and return. Each successful claim has cost £240. It would have been cheaper to visit them all personally.

Other means-tested benefits do little better. Government figures show that nearly a quarter of a million people over 60 fail to claim extra help with their rent and more than a million could claim a reduction in their council tax but do not do so. And a new means-tested Government scheme is already in trouble. Since June people over 60 in England with a low income have been able to qualify for a grant of up to £2000 to fit central heating and insulate their homes. But in the House of Lords on Monday Baroness Greengross claimed it was not working.

"I understand that only 35,000 of the poorest pensioners have benefited by having free central heating and insulation, and that the target figure is 280,000 by summer 2002. What plans do the Government have to ensure that that target is met?"

For the Government, Lord Whitty insisted that technical problems were responsible and it would hit its target "to within a few thousand".

These failures strike at the heart of the Government’s plans to target resources on the poorer pensioners. More than £1 billion which is due to poorer pensioners is already going unclaimed and there could be worse to come. In April the Government will raise the minimum income guarantee substantially. It will top-up the income of single people over 60 to £92.15, nearly £20 a week more than the new rate of state pension £72.50. Couples will get £140.55. At the same time it will raise the capital limits which at the moment prevent anyone with more than £8000 savings from claiming the minimum income guarantee at all. That limit will be raised to £12,000. And a lower limit, which reduces the money paid, will be doubled to £6000. These changes will mean that another 100,000 people will be able to claim the minimum income guarantee. Though on present trends around 30,000 of them may fail to do so.

Over the next few years, mean-testing will be extended to one pensioner in every two. If it wins the Election, Labour plans to replace the minimum income guarantee with a new pension credit. It will in effect be a mean-tested top-up to private pensions and other income and the Government has said that half of all pensioners will be entitled to it. Unless the Government cracks the take-up problem it is hard to see how that policy can work. Just as Labour said about means-testing when it was Opposition.

3 February 2001

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