Mass means-testing has failed pensioners - Webb
- Published on Thursday, 29 March 2012 15:32
- Posted by Scott Buckler
A new approach to encourage poorer pensioners to claim Pension Credit using automatic payments has had little impact, DWP research reveals today
Paying people Pension Credit automatically only increased take-up by 8.6 per cent.
In an effort to get more people to claim this support, the DWP used the customer information it holds to best determine who might be eligible for Pension Credit and trialled paying the benefit automatically for 12 weeks to those individuals.
Minister for Pensions Steve Webb said:
"We are doing all we can to ensure poorer pensioners get the help they are entitled to, but clearly the current system is not working.
"Despite our best efforts, mass means-testing has failed pensioners. Pension Credit is not getting to over a million people who are entitled to it, despite millions spent by successive governments to encourage take up.
"The goal is for people to retire on a decent income, which is why we will introduce a flat-rate single tier state pension for future pensioners in the next Parliament, set above the level of the basic means test. This will lift more pensioners out of means-testing and ensure they have a decent and secure income in retirement.
"I would encourage all pensioners who think they might be eligible for Pension Credit to give us call to find out."
The research showed that, on the whole, people appreciated being told about entitlements they may not have known about, but most did not then go on to make a claim.
Even following automatic payment, people continued to think they would not be eligible, had a negative attitude towards the claims process, or felt they did not need the additional income.
Others misunderstood aspects of the study, or were confused about the income and savings thresholds, or had health issues or simply forgot.
Entitlement to Pension Credit depends on a wide range of personal circumstances including income, capital, whether a person has certain disabilities or caring responsibilities and housing costs.
Measures the DWP has undertaken to encourage Pension Credit take-up include introducing telephone claims without the need for a signed claim form, working closely with local organisations, and a digital toolkit resource to help those who work with older people identify who might be eligible and explain the application process