Pensions Bill

: I am delighted to respond positively to the debate on behalf of the Government. This is not a personal response, so I hope that it will be a long-lasting response. Clause 3 has the effect of replacing home responsibilities protection with a new more generous system of contributions credits for carers. Before turning to the amendments, I shall set out how the provisions in the clause achieve that. It is important to take a few moments to do so for the reasons raised by the noble Baronesses. The pensions system has recognised the valuable contribution of full-time carers since the mid-1970s. Home responsibilities protection—or HRP, as it is commonly known and has been referred to today—recognises three broad groups of carer: first, those undertaking a parenting role, including parents awarded child benefit for a child under 16; secondly, registered foster carers since 2003; and, finally, those caring for severely disabled people. Although at first HRP was a ground-breaking recognition of other ways of contributing to society alongside working, aspects of it make carers less certain about the state provision they will get when they reach pension age. In order for HRP to protect someone's basic state pension, that person must be in one of these categories for a complete tax year, as has already been mentioned. For example, if a woman had a child in May and was subsequently awarded child benefit, from that point she would not necessarily qualify for HRP that year. HRP provisions would take effect from the following tax year, with each complete year of HRP reducing the number of qualifying years needed for a full basic state pension. HRP has worked well, but it is difficult for people to understand. Clause 3 will be much simpler. It introduces new contributions credits for relevant carers. And, as with all national insurance credits, they will be available to people from age 16—and I hope that offers some reassurance—until they reach state pension age. I shall speak more about16 year-olds in a minute. Moving to a system of credits will address the more negative aspects of HRP. People can combine part years spent caring with time spent working, or some other credited activity, in order to accrue sufficient contribution credits for a qualifying year. Each qualifying year is recorded against the 30 needed for a full basic state pension, making the system simpler to understand. I turn to Amendment No. 7. There are three groups of carers—not so very different from those recognised under HRP—who will benefit from the contributions credits under Clause 3. These are set out in subsection (3) of the clause, the subsection that the noble Lord, Lord Skelmersdale, seeks to remove—although I appreciate his amendment is probing. The first and second groups are persons awarded child benefit for a child under the age of 12 and approved foster parents. The third category of carer is those ““engaged in caring””, and the definition of this group will be set out in regulations. I shall explain more about this group and the approach we are taking. I wish to offer as much reassurance to the Committee as possible. The Government are very proud of this area and to be moving forward providing additional support for carers. Currently, HRP can be awarded to someone looking after a severely disabled person for at least 35 hours a week. However, very few people claim it. Only about 1 per cent of HRP is awarded for care of severely disabled people, as most people who provide this level of care receive credits through the carer’s allowance. However, we recognise that those providing at least20 hours of care a week can be disadvantaged in the labour market. For this reason, the proposed regulations will ensure that anyone in this group will be able to claim the new carer’s credit. When we introduced the Bill, we stipulated in the accompanying delegated powers memorandum that the person or persons being cared for should be entitled to the attendance allowance, the middle or higher-rate care-component disability living allowance, or the constant care attendance allowance. We did this originally so that we could take a light-touch approach to determining entitlement to the credit, but we have listened to representations from a number of organisations and to the debate in another place. That is why my noble friend reiterated at Second Reading the Statement on the carer’s credit made by my honourable friend James Purnell, the Minister for Pensions Reform. To be absolutely clear, there will be two routes by which people will be eligible for the carer’s credit, and they will both be covered in the regulations. First, as I have stated, the carer’s credit will be available to those caring for at least 20 hours a week for one or more severely disabled people with certain qualifying benefits. Secondly—this is the important point—a person will be eligible for the carer’s credit if they are certified by a health or social care professional as caring for at least 20 hours a week, irrespective of whether they are caring for someone with or without benefit entitlement. Through this second route, we are providing even more flexibility to deal with the situation whereby the person being cared for is not entitled to one of the specified benefits or chooses not to claim it. In this case, the carer will get the carer’s credit if they are certified by the health or social care professional as caring for at least 20 hours a week. We plan to explore this process fully through the review of the national carer’s strategy, in which carers’ organisations are actively engaged. I stress that this is a consultation on how the process will work and not on whether the regulations will include this alternative route. This has been stated in the Commons and restated here on Second Reading, and I make these points for the record now. We do not believe that it is necessary to put a separate definition in the Bill to recognise those certified by health or social care professionals as caring for at least 20 hours a week, which Amendment No. 8, tabled by the noble Lord, Lord Oakeshott, seeks to do. The same effect will be achieved through the regulation-making power that is already set out. Importantly, the regulation-making power will give this and future Governments the flexibility to reflect the changing nature of care over time and the needs of an ageing population. I hope that I have been able to reassure noble Lords. The noble Lord, Lord Skelmersdale, made a point about child carers. I, too, recognise the enormously important role that young carers play. I should state for the record that children under the age of 16 who may receive the carer’s allowance will receive credits in the same way. Young adults of 16 and 17 also receive starter credits. I, too, believe very strongly that young adults of 16 and 17 should be advised of their entitlement and moved swiftly and confidently on to these credits. The Children Act has provisions for local authorities to pay particular attention to the needs of child carers and to their needs when they turn 16 and become young adults. That should be in place, particularly for children who are being treated as children in need. I hope that I have offered the reassurance that noble Lords seek, and that the noble Lord will withdraw his amendment.