Source · Select Committees · Public Accounts Committee
Recommendation 21
21
Some of those who contacted the Department prior to the LEAP exercise starting in January...
Conclusion
Some of those who contacted the Department prior to the LEAP exercise starting in January 2021 received special payments of interest on top of their underpayment.54 The Department chose to stop paying interest on arrears, citing value-for-money considerations and comparability of treatment in other LEAP exercises.55 When we challenged the Department on the fairness of this treatment, it stood by its decision not to pay blanket compensation under LEAP exercises and said that ‘it was not seeing the pre-January cases in the context of the wider principle, because they had not begun a LEAP exercise’.56 We asked the Department about whether it had considered the effects of inflation on underpayments, given some of the errors go back decades. The Department told us that it was seeking only to pay people ‘what they are entitled to’, which did not include an element of compensation.57 Potential for further errors
Government Response
Not Addressed
HM Government
Not Addressed
6: PAC conclusion: In paying pensioners, a lump sum of their arrears, the Department may not be fully restoring them to the position that they would be in had the Department paid them correctly in the first place. 6a: PAC recommendation: The Department should establish the full extent of the impact on pensioners of receiving a lump sum of arrears of benefit, particularly for larger sums of arrears. It should seek assurance from local authorities that people are not treated prejudicially compared to how they would have been treated had they received the money over their proper period of entitlement. 6.1 The government disagrees with the Committee’s recommendation. 6.2 The department’s letter to the committee dated 15 November 2021 provided a full explanation of the impact State Pension arrears payments may have on other benefits and financial assessments for adult social care. 6.3 The department does not intend to change the current legislative position. It is well- established that State Pension payments are taken into account within the assessment of entitlement to means tested benefits. Accordingly, to prevent duplicate provision from public funds, State Pension arrears will be reduced to take account of Pension Credit that would not have been paid had the State Pension been paid on time. 6.4 For both Pension Credit and Housing Benefit, any remaining State Pension arrears are capital and are treated in line with the normal rules. 6.5 There is long-standing principle of personal responsibility for social care in England, as well as a safety net that supports significant numbers of people today. Under the Care Act 2014, charging is based on a number of principles including that people should not be charged more than it is reasonably practicable for them to pay and that charging approaches be clear, transparent and comprehensive so people know what they will be charged. 6.6 Where a local authority charges a person for their care and support, regulations set limits below which a person’s income and capital must not be reduced by charges. Regulations do not provide any means for State Pension arrears payments to be ignored as part of an adult social care financial assessment. The responsibility for interpreting and applying the regulations and guidance rests with local authorities. 6.7 Social care policy is devolved in Northern Ireland, Scotland and Wales.