Pensions Bill

I fear I am going to disappoint my noble friend yet again, but I hope I can convince her that in doing so we have a good basis for supporting grandparents. I am conscious of the heroic efforts of many grandparents in supporting their children and their grandchildren. I have had the opportunity twice in recent months, together with the noble Baroness, Lady Massey, to meet groups of grandparents and understand some of the tragic circumstances that they have encompassed in their lives and the struggles they have. We reasonably address their circumstances under the Bill. Broadly speaking, the amendments seek to give national insurance credits to a relevant grandparent or other relative who is engaged in looking after a child to whom they are related. In the debate on the previous group of amendments we discussed how we intend to define ““engaged in caring””. It would be interesting to hear from my noble friend how we define ““engaged in looking after”” and how that differs from ““engaged in caring””. In the debate that has taken place we have to a certain extent conflated those two concepts, and it is important that we separate them. ““Looking after”” could be more occasional, and something less than ““caring””. We already have a tried and tested way of identifying those who are looking after children, through the award of child benefit—which also carries with it HRP, as my noble friend said, or, from 2010, the new credit. That credit can be switched to whichever parent needs it, provided that the child benefit is switched as well. The noble Lord, Lord Skelmersdale, will press that point in an amendment to which we will come shortly. In other words, the credit goes with the child benefit, as it is awarded in recognition that the parent is the primary carer of the child, usually the mother. However, there is existing provision for parents to relinquish their child benefit award. I assure noble Lords that HMRC, which administers child benefit, takes great care to ensure that parents or other child benefit awardees are aware of their right to relinquish entitlement to it in favour of the person who gives up work to look after the child. Certainly, some of the grandparents I have met are in receipt of child benefit. They are entitled to it because their children, sometimes for very tragic reasons, have given up the care of their child. It follows logically that if grandparents or other relatives take on the role of primary carer, they would be entitled to child benefit and the credit in their own right. The credit would run for S2P as well as the basic state pension, something not covered by the amendment. I neither underestimate nor undervalue the role that grandparents or other relatives can play in looking after a child. However, research suggests that the majority of those providing any childcare do so for just one or two days a week. I would distinguish the childcare that takes place in tragic circumstances following the death or effective loss of a child, perhaps through drug or alcohol dependency, from the casual support that people give their grandchildren. That statistic about caring for grandchildren one or two days a week on average gives credence to the view that most grandparents—or, rather, family relatives—do not generally perform the role of primary carer and may not therefore be disadvantaged when looking for work. On that basis, it would be wrong to award class 3 credits to the generality of grandparents rather than, as the Bill does, supporting those grandparents and others who are involved in caring. We have just discussed our plans for a new carer’s credit. There is no reason why a grandparent should not be eligible for the carer’s credit if they fall within the relevant criteria. For example, a grandparent might be providing care of 20 or more hours a week for a disabled grandchild to provide the mother with breathing space. Even if the mother is in receipt of carer’s allowance for that child, there will be no reason why the grandparent should not be eligible for the carer’s credit. In another situation, a person may be providing 20 or more hours care a week for their son or daughter, who is suffering from drug or alcohol dependency, as well as taking care of their children. In those circumstances, the grandparent could be eligible for the carer’s credit for looking after their son or daughter if they were either receiving the appropriate benefit or the need for care was certified by a health or social care professional. Furthermore, by definition, today’s grandparents were yesterday’s parents. If they retire after 6 April 2010, they will benefit from the conversion of years of home responsibilities protection from 1978 onwards, in respect of their own children, into years of credits, and of course from the reduction to 30 qualifying years to help them qualify for a full basic state pension. As a result of the Bill, a combination of credits for being in receipt of child benefit for their children and subsequently credits for caring fortheir children, or the award of child benefits for their grandchildren, could mean that only a few years of intervening work would enable them to achieve a full basic state pension. This is a major change resulting from the Bill. In my view, there is a significant difference between providing care and looking after somebody. We have sought to protect the pension rights of someone providing significant levels of care, either as the primary carer of a child or a disabled person. That is not the same as looking after a child on an occasional or ad hoc basis. Of course there can be hard cases but I hope the examples I have given show that what we are putting in place will provide effective coverage. I have not dwelt on the practicalities of pursuing the route that my noble friend suggests, but there are clearly practical implications for establishing the credit, should the amendment be adopted. As I said, I do not underestimate the importance of the role of grandparents or indeed other relatives in modern families. However, I believe that the amendment would be a step too far in supporting grandparents generally for doing what they have always done—providing help and support for their families. In the light of this, I ask my noble friend to withdraw her amendment.