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Tuesday, 16 August 1960

If present scales of benefits were to remain as they are, it is estimated that total expenditure from the National Welfare Fund in this year would be £322,355,000, which would be approximately £23,000,000 greater than expenditure in 1959-60. I stress that, because some critics say that we should balance our Budget by keeping our expenses where they were last year. Well, without any movement in pension rates, and due only to the increase in the number of pensions, there would be an increase of £23,000,000 in a year. 1 may point out that, of this very large total, some £163,000,000 would be for age. invalid and widows' pensions, £74,000,000 for child endowment and £74,000,000 for the various health services, including tuberculosis benefits.

Again, however, the Government has decided that, despite the overall objective of keeping commitments down, it should make some additional provision for those members of the community who, through age or other circumstances, are least able to assist themselves.

A further increase in age, invalid and widows' pension rates will be made this year. They will be raised by 5s. per week, making the new maximum pension rates, exclusive of any further pension payable for children, as follows: -

 

In addition, of course, single pensioners who have no income other than their pension, and who pay rent, are able to obtain supplementary assistance of 10s. per week.

The cost of these increases is estimated at £9,100,000 for a full year and £7,000,000 for 1960-61.

Since it assumed office, the Government has done a great deal to extend the eligibility for pension benefits of various classes of people by its successive relaxations of the means test. A further important step is now proposed. A structural change will be made in the means test which will remove what has been widely regarded as an anomaly in the operation of the means test on property as compared with the means test on income.

This matter has had the attention of the Government over a considerable period and my colleague, the Minister for Social Services (Mr. Roberton), has been most active in seeking a solution for a complex problem. I am happy to say that the Government has now been able to evolve a scheme whereby income and property may be merged for the purposes of assessing pension entitlement on a common basis.

Whereas in the past two independent means tests operated - one on income and one on property - the new means test will take into account one composite figure representing the pensioner's " means as assessed ".

In the case of age and invalid pensioners and widows with no dependent child or children, " means as assessed " will comprise the pensioner's income, which by definition does not include income from property, together with a property component. This property component will be £1 for each complete £10 of the pensioner's property in excess of the £200 disregarded. The ra.e of pension payable will be the maximum rate less the amount by which " means as assessed " exceeds £182 per annum. The property bar of £2,250 beyond which no pension is now payable will be removed.

The new means test will ensure that no pe son who qualifies for an age, invalid or widows pension will receive less than the maximum rate until income and/or the property component exceeds the present amount of permissible income - £182 per year. The pension will then, in the normal way, be reduced by the amount of the excess.

A widow with a child or children may now have property up to £2,250 without the rate of her pension being affected. If the value of her property exceeds this figure, no pension is payable. Under the new means test, where a widow's property does not exceed £2,250 it will continue to be disregarded. Where it exceeds £2,250, £1,000 will be disregarded and the new means test applied, as in the case of age and invalid pensioners.

The new proposal offers an inducement to save, to acquire and to retain property in exactly the same way as people are encouraged to employ their resources and energies to provide income. The t treatment of income and property under th; means test will thus be brought into closer harmony.

Perhaps this is not easy for honorable gentlemen to follow, or for people who may be listening outside, but a more detailed explanation will be given by my colleague the Minister for Social Services in a statement he proposes to issue to-morrow morning.

The new means test will add £4,200,000 to the cost of pensions for a fu'.l year and £1,500,000 in 1960-61.

At present, women whose husbands are in prison are, in certain circumstances, eligible for a maximum pension of £4 2s. 6d. per week. They will, as far as rates and means tests go, be treated in future on the same basis as widows and, if there are any children, may receive a basic rate up to £5 5s. per week, with a further 10s. for each child after the first.

The increased rate of pensions will be applied on the first pension pay-day following the passing of the necessary legislation. It will take some time for the Department of Social Services to make the arrangements required for the opera. ion of the new means test. It will commence from a date to be proclaimed which is expected to be in early March, 1961.

The total cost of these additional benefits is estimated to be £13,300,000 in a full year and £8,500,000 in 1960-61. On the other hand, the repatriation proposals in relation to medical treatment will involve a saving in expenditure f om the Welfare Fund of £157,000 in 1960-61. After allowing for these factors, to. al expenditure from the National Welfare Fund in 1960-61 is estimated at £330,698,000 or £31,335,000 more than last year. Further details of the National Welfare Fund estimates are contained in Statement No. 5.







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