Source · Select Committees · Home Affairs Committee
Recommendation 51
51
Acknowledged
Paragraph: 191
Claimants struggle to document lost earnings, resulting in limited and problematic compensation awards.
Conclusion
As the Home Secretary has acknowledged, it is not possible for some claimants to document what their earnings were or would have been when they lost access to employment because this information is not always accessible or may never have been recorded. We are concerned that too many people in these circumstances are receiving a general award which is limited to the minimum level of earnings as measured by the 2019 National Living Wage. Furthermore, we consider that the limitations on compensation for loss of future earnings and loss of pension are very problematic given that many claimants are approaching pensionable age.
Government Response Summary
The government explains that compensation for loss of access to employment is calculated using the 2017 National Living Wage for consistency and to avoid delays, clarifies that occupational pensions are excluded, but states National Insurance positions will be corrected for State Pension entitlement.
Paragraph Reference:
191
Government Response
Acknowledged
HM Government
Acknowledged
How compensation is calculated for losses in employment has been very carefully considered to be as generous and simple as is reasonably possible. We have designed the loss of access to employment category to allow us to better acknowledge, and therefore compensate individuals for the situations and circumstances they have found themselves in. Changing the tariff to align with a changing National Living Wage would be a disadvantage to those whose compensation claims are resolved more quickly so it is important to have one constant tariff. We have pegged the tariff to the 2017 National Living Wage because most losses that may have occurred due to an inability to prove status have occurred prior to 2017 and for any losses following 2017 it is much more likely to be able to find documentation which can provide an accurate compensation amount. Across all categories our aim is to provide compensation in a way that is not complicated for our claimants or requiring and excessive amount of evidence which would delay the conclusion of a claim. The Scheme excludes impacts or losses related to occupational pensions. Where a claim is accepted under loss of access to employment or benefits, the Government will seek to ensure that the individual’s National Insurance position is corrected so the period of the loss does not impact their State Pension entitlement. Arrangements for this complex area, building on experiences from the Compensation Scheme so far, are being finalised across Government.