(Extension of period for obtaining benefits.)
Regulation 12 of the National Insurance (Claims and Payments) Regulations 1948 shall have effect as if for the reference to a period of six months there were substituted a reference to a period of twelve months.—[Mrs. Thatcher.]
Brought up, and read the First time.
I beg to move, That the Clause be read a Second time.
The Temporary Chairman (Sir Barnett Janner)
It may be for the convenience of the Committee if, with this new Clause we discuss new Clause No. 3—Extension of period for claiming benefit.
That would certainly be suitable, Sir Barnett.
Time limits are an old feature of insurance legislation, and towards the end of my time in the Ministry I took special interest in certain of these time limits because some of them appeared to me, as a lawyer, to be particularly harsh. During last year we looked once again, through the National Insurance Advisory Committee, at the time limits for claiming sickness benefits, and those were revised. In this new Clause and in new Clause No. 3 I am drawing attention to other time limits which operate particularly harshly.
I refer, first, to the time limit under which a benefit can be extinguished if the order is not cashed within a certain time. The only long-term benefit to which I am entitled happens to be one under the Family Allowances Scheme, but the same rules apply to other order books. It will be found that if the weekly order is not cashed within six months, all right to the amount on the face of that order is extinguished.
Like many other people, I had not read the small print on the order very closely before I went to the Ministry. I may have read it when I first received the book, but that was a long time ago, and I had forgotten that if the order was not cashed within that time one lost right to benefit. The period used to be three months, but it was raised to six months. But there is an absolute bar to benefit if an order is not cashed within that period. [column 857]
This bar occurs under the Claims and Payments Regulations 1918, which have been amended since and are now extremely complicated. Some of the regulations no longer exist. Nevertheless, there is still an absolute bar to a person's receiving benefit if he has not cashed the order within six months.
This can give rise to considerable hardship. Let us take the case of a mother who is thinking of accumulating her family allowances after Christmas. Her son or daughter may be going to a grammar school or secondary modern school in September, and a new uniform may be required. So she decides to accumulate her family allowances between Christmas and, say, September. She then goes to cash the whole lot at the beginning of September in order to receive a nice lump sum to pay for the uniform, but she discovers that all those allowances which were due to be paid in January and February are out of time, and that try as she may she will have to forfeit those amounts altogether.
A similar regulation applies to postal drafts received from the Ministry. A postal draft in relation to sickness benefits may have been claimed. The title to that benefit will have been investigated and agreed by the Ministry and when that postal draft is sent out it is agreed that the person to whom it is sent has a right to the sum on the face of the draft. There is no difficulty about investigating that part of the transaction again.
The draft may then be put in a drawer, because somebody is ill in the house, and may be forgotten for six months Many other types of drafts cannot be cashed after six months, but title to the sums on the faces of those drafts is not lost. But if a person with a postal draft for sickness benefit goes to the Ministry and says, “Please will you replace this draft with another for the same amount?” he learns for the first time that there is an absolute bar of six months to that benefit. If the draft has not been cashed, it is not only that instrument which is non-encashable, it is the title to the benefit which has disappeared. Once or twice, towards the end of my time in the Ministry, I made inquiries about this, and there was always some reason why we should not extend the period. Nevertheless, I am anxious that the National Insurance Advisory Committee should now look at this problem again. [column 858]
I understand that the main problems remaining are administrative and that, once the period of title is prolonged, the Ministry would have to keep so many forms and orders that they would need far more extensive storage space. Nevertheless, to a lawyer who is used to dealing with claims and with evidence which may relate to matters which happened up to six years back, the period of six months seems very short indeed. It is said with regard to the orders which appear in books—where one has a book, which usually lasts for a year—that when one signs that order one signs that certain conditions have been fulfilled, that one has not been in hospital, for example, or that one's earnings were not more than a certain amount.
A part of the reason why it is said that the period of the claim could not be extended is that it would be difficult for a person to remember what happened as far back as six months or longer than six months, and difficult for the Ministry to investigate. As a lawyer, one remembers many occasions in court when evidence is given about an accident which took place two or three or even four years before the court action. Witnesses have no difficulty in recalling the facts of the case.
This does not happen in many cases. Sometimes the facts are there and are ascertainable, but even so the bar is absolute—even where all the facts have been proved without dispute. There is still then an absolute bar to benefit. This is a very modest Amendment. It asks that the period should once again be moved from six months to 12 months. Alternatively, I would ask the right hon. Lady if the matter could once again be referred to the National Insurance Advisory Committee.
There is, of course, another aspect to this particular group of Regulations and that concerns problems such as retirement pensions. Here, also, there is an absolute bar of six months. In the first place it is three months, which can be extended to six months if good cause for delay in claiming is shown, but there is an absolute bar of six months in claiming arrears of benefit. This can give rise to considerable individual disappointment in cases such as that of a deserted wife who is entitled to retirement pension on her husband's insurance. She [column 859]is no entitled to that pension until her husband retires. She may not have heard from her husband for some time and she does not know when he actually retires. Her only way of finding out is by persistently making inquiries from her local National Insurance Office. Cases have arisen where deserted wives have heard that their husbands have been retired perhaps for a year or more. That, if known, would have entitled them to pension for a year or more, but when they go to the office they are told that there is an absolute bar to arrears of pension after six months.
Occasionally, we came across the sort of case where people believed that the earnings rule still persisted beyond the first five years after retirement. One could get a man of, say, 72 still earning, and his family believing that he is not entitled to pension because he is earning more than £5 or £6 a week. He then learns, perhaps by accident, that he would have been entitled to a pension because the earnings rule ceases to operate for a man aged 70. He is very pleased, because he thinks that he has one or two years' pension in hand. But he learns that, at the most, he can get benefit for only six months back.
Some of these rules have been changed before. Last year we looked at the time limits for sickness benefit. I understand that neither the Parliamentary Secretary nor the right hon. Lady can accept today an Amendment designed to provide for a straight increase from six months to 12 months, but I think that we might ask the National Insurance Advisory Committee to look at this again, with a very strong indication that we should like this time limit extended. I say to the Parliamentary Secretary that this was one of the bees that I had in my bonnet and it will go on buzzing. I shall be very glad if he can give me an assurance that this will be referred to the National Insurance Advisory Committee or that he will look at the problem.
The Joint Parliamentary Secretary to the Ministry of Pensions and National Insurance (Mr. Harold Davies)
I am sure that hon. Members will be grateful for the way in which the hon. Lady the Member for Finchley (Mrs. Thatcher) has put the problem. In view of that, and because many hon. Members were up [column 860]late last night, I propose merely to try to deal with the main points. I hope that I shall be able to assure the hon. Lady that it was well worth while to move this Motion, as undoubtedly it has resulted in an addition to the wealth of information which is being built up all over the country about the problem of the Welfare State of the future—a phrase which has been agreed by hon. Members on both sides of the Committee.
The new Clause under discussion seeks to extend the time limit in which retirement pensions and widows' benefits may be claimed and the limits within which payments of national insurance benefits can be claimed. It is quite clear that the question of the payment of pensions in arrears is one which has worried the hon. Lady and it may be that it has worried other hon. Members. The hon. Lady drew a comparison between that and cases which she has encountered in her experience as a lawyer, but I think that they are problems in different categories. A few observations on the new Clause may, however, be of some worth to the Committee.
Its provisions would affect only claims to retirement pension and widows' benefit. New Clause No. 3, of itself, would not extend the period to 12 months in which arrears on claims might be paid. A further provision in the regulations which precludes the payment of arrears over a period of more than six months would have to be amended, and that is a provision to which this Clause does not apply. The time limit to which I have referred was reviewed this year and approved by the National Insurance Advisory Committee. There is a further regulation affecting retirement pensions, specifying the notice of retirement pensions, specifying the notice of retirement which must be given, which could affect the payment of arrears. This would need a further amendment which is not provided for in the new Clause.
Time limits on payments and claims were examined from 1950 to 1952 by the National Insurance Advisory Committee which, in its 1952 Report, supported the existing arrangements in general. Although I do not suggest that we should slavishly follow the Committee's main reasons, it is probably worth while mentioning them. First, entitlement to benefit does not depend on retirement [column 861]or on widowhood alone. Secondly, continuing conditions affecting benefit must be satisfied—namely, the earnings rule for retirement pensioners, reductions for periods in hospital, the effect of overlapping benefit rules, eligibility for dependency allowances, absence abroad and so on. All those possibilities have to be taken into account.
If we were not careful, we would be confronted with the difficulty of establishing the facts in regard to past periods during which claims were made. These types of payment were originally worked out on the basis of weekly national insurance benefits which were regarded, even by Beveridge and the first post-war Labour Government—and by the present Opposition when it was in Government—as being primarily for current maintenance.
The effect of the other new Clause would be to extend from six months to 12 months the period in which benefit payments might be obtained, and a few observations on the scope of the Clause might be worth while at this stage.
The rules governing extinguishment to benefit after six months were approved in 1952 by the National Insurance Advisory Committee in the Report to which the hon. Lady and I have referred. An additional point that has not been mentioned is that we are not here dealing with a few cases. The result would be that storage of many million more paid orders would have to be provided for, and it is doubtful how far the increased administrative costs would be justified. The total number of extinguishments is very small indeed in relation to the very many millions of payments made, but that does not mean that we ought to brush aside these two new Clauses.
There are practical difficulties to this and my right hon. Friend has agreed that we would be prepared to look into the problem. While I cannot give any assurance now, I hope that the hon. Member for Finchley will accept that we are prepared to look into this—and I am not discussing the general review to which so much reference has been made. Outside of that we are ready to look into this question. I hope, therefore, that the hon. Lady will be prepared to withdraw the Motion, because the spirit in which [column 862]she has posed the questions involved has resulted in an exploratory debate and is a constructive contribution to the search for an answer to problems which, we hope, some day very soon to be able to solve.
I thank the Joint Parliamentary Secretary very much, but I am a little disappointed. He gave the same arguments which I know backwards, although he sounded as if he actually believed them. I do not think that I ever sounded as if I believed them. Indeed, I do not think that I ever gave them from the Dispatch Box.
However, the year 1952 is a long time back and it was then that the National Insurance Advisory Committee last looked at this question. Some of the reasons which the Committee then advanced for retaining the strict time limit are very out of date. For example, one reason was that this is a weekly benefit, meant for weekly outgoings. That reason bears no relation to modern life. The rates do not come in weekly, and even the Ministry itself will pay retirement pensions quarterly. Now all kinds of people draw retirement pensions and it is nonsense to say, “If you do not draw it weekly you do not need it and must therefore lose your right to it.”
This is very much a picture of an old welfare scheme not at all suited to modern needs. I hope that, as a result of this discussion, the Joint Parliamentary Secretary has his prejudices in the right place and that his prejudices are in favour of a longer time for claiming benefits.
The hon. Lady must not jump to conclusions. It was only because of her prepossessing smile and the charming way in which she moved the Motion that I did not want to enter into a cut and thrust debate. I think this is a constructive proposal and I do not want to draw too much attention to the fact that it is only a few months since the time limit for claiming sickness benefits was reviewed and the maintenance of those limits was recommended in Cmnd. 2400.
I appreciate what the hon. Gentleman says and I am not getting involved in a cut and thrust debate either. If he thinks that this is cut and thrust he should see me when I really get going. In case I do get going, it will be as well [column 863]if now, Sir Barnett, I beg to ask leave to withdraw the Motion.
Motion and Clause, by leave, withdrawn.
Schedule 1 agreed to.
Schedule 2.—(Provisions to be substituted in Part I of Schedule 2 to Insurance Act.)
Dame Edith Pitt
I beg to move Amendment No. 10, in page 10, line 14, to leave out from “112 6” to end and to to insert:
42 6/34 6/32 6/——
The Temporary Chairman
With this Amendment I suggest that we also consider the Amendment in the name of the hon. Member for Finchley (Mrs. Thatcher), and other hon. Members, in page 10, line 16, leave out from “80 0” to end and insert:
42 6/34 6/32 6/—
Amendment No. 12, in line 18, leave out “40 0” and insert “42 6” .
Amendment No. 13, in line 26, leave out from “allowance” to end and insert:
42 6/—/34 6/32 6/——
Dame Edith Pitt
That would be convenient, Sir Barnett.
The purpose of all these Amendments is an endeavour to maintain for certain children of beneficiaries the priority and the preferential treatment which have been given to them in recent years by the last Government. The Amendments relate, first, to widow's allowance, which is the payment made during the first 13 weeks of widowhood; secondly, to widowed mother's benefit; thirdly, to guardian's allowances, which are the payments made in respect of certain orphan children; and, fourthly, to child's special allowance, which is a payment made in certain circumstances to a child whose parents have been divorced and whose father has since died.
In all these cases in recent years, beginning I think in 1956, we have given preferential treatment to the children when there has been an increase in benefits. By far the largest group must be the children of the widowed mother. It has been felt on both sides of the House of Commons that the widowed mother is in a position [column 864]which specially commands our sympathy, because she must accept the burden of bringing up her family—the financial burden of ensuring that there is enough money to keep it and the personal burden of standing in as both parents to a growing family.
Thus it was felt that the best way to help her—the help extended to the other two classes of children—was to increase the payments made for her children. She benefited when there was a general increase in the pension payment to all beneficiaries, but on several occasions in recent years there was added an extra amount to the children, which could never be withdrawn by the operation of the earnings rule and which was paid directly to the children who were her prime responsibility.
I am a little distressed that the Bill does no more than give to the children of the beneficiaries I have listed the same amount—2s. 6d. extra per child—as it does, for instance, to the children of a man on sickness pay, a man on unemployment pay, or, in cases where there are children, a retirement pensioner. I should like to feel that the Committee is prepared still to continue this measure of preferential treatment, which goes directly to the children concerned in all cases, is not affected by any outside consideration, and benefits the widowed mother, children who are accepted under National Insurance as having a claim for benefit because their parents have been divorced and their father has died having regularly paid his contributions until his death.
In the past the present Government have never voted or spoken against this preferential treatment for the children of whom I speak. I hope that tonight they will be able to agree that we should continue to keep these children ahead of the rates of benefit for other children who enjoy both parents, whatever their present difficulties may be. I should like to think that the whole Committee agreed with the principle of giving to children who must have lost at least one parent, in some cases both, the extra opportunity, however modest it may be, that we have been able to accord to them since 1956. I hope that the Amendments are acceptable.[column 865]
The Hon. Lady the Member for Finchley (Mrs. Thatcher) was correct in saying that when we were in opposition we never voted against the preferential treatment that was given to the children of widows and the other classes covered by these Amendments, Indeed, not only did we not vote against them but we definitely supported this preferential treatment.
Two of the Amendments under discussion would increase by 2s. 6d. the rate that would be given for each child of a widow who was receiving the widowed mother's allowance or the widow's allowance. The other two Amendments would cover the children of those in receipt of the guardian's allowance and the special allowance for children. On the face of it, it would seem that the Amendments should be accepted in this instance.
From 1948 until 1956 the rates for all children were the same; in other words, for the categories we are discussing, for the children of the sick and unemployed, and for children of retired pensioners. It was in 1956 that the first change was made. Hon. Members should realise that if the Amendments are not accepted—and I will ask the Committee to reject them—the children of the widowed mother will still have 17s. 6d. of a lead over the children of the unemployed and sick—and 17s. 6d. is a considerable lead in these matters.
We have always agreed that it is just that there should be higher payments for the children of widows, as well as for the other categories covered by the Amendments. However, in framing the Bill it was not by any mistake that we decided on a flat-rate increase of 2s. 6d. We felt that this time—for good reasons, which I shall adduce—a flat-rate increase of 2s. 6d. was the correct thing to do. Only in March of this year there was an increase for all the widows' children covered by the Amendments, a considerable increase which raised the allowance from 30s. to 37s. 6d., but for the children of the sick and unemployed there was no increase in March.
When I had to decide what to do in the Bill, I naturally had to take into account the increase of 7s. 6d. given only in March of this year to those children of widows and the others [column 866]qualifying for the child's special allowance, along with the fact that no increase at all had been given this year to the children of the sick and unemployed. It seemed to me—and I hope that it will commend itself to the Committee—that as we are discussing the Bill in December it was right for us to give a flat-rate increase of 2s. 6d. to the dependent children of all categories.
I also draw the attention of the Committee to the need to have regard to the whole family in these matters. It was because, in giving consideration to this, that I had to take the whole family into account that I decided that a flat-rate increase of 2s. 6d. was the right course to take.
Under the Bill, the widow with one child will receive £6 a week. A sick or unemployed man with a wife and one child will receive £7 12s. 6d.—£1 12s. 6d. more to keep his wife. A widow with two children will get £8 a week under the Bill. A sick or unemployed man with a wife and two children will get £8 15s.—only 15s. more with a wife to keep. A widow with three children will have £10 a week under the Bill. A sick or unemployed man with a wife and three children will have £9 19s. 6d.—6d. less than the widow with three children.
It may be said that sickness and unemployment benefits are short-term benefits.
Dame Edith Pitt
The hon. Lady nods agreement. But that is not always so. What about the chronic sick? A man may be sick month after month and year after year, with all the expense that that involves. Should not we consider the wife and children of the chronically sick man? In some areas in Scotland and the North of England and in some parts of Wales a man may be unemployed for a very long time. Again, it seems to me that there must come a stage in these considerations when we should consider the family of such people.
Therefore, because of the increase of 7s. 6d. given in March this year, and because of the comparisons which I have just made between the position of a widow with one, two or three children and that of a sick man with a wife and one, two or three children, I hope that [column 867]the Committee will feel that the flat rate increase of 2s. 6d. is correct. That does not mean that in future there will always be a flat-rate increase of 2s. 6d. or of any other amount. It may be that we will have to make special provision for the children of widows. However, this time we felt, I think rightly, that the provisions which we were making were correct.
I hope that with that explanation the hon. Lady will be willing to withdraw the Amendment.
This is the point which I have been anxious to reach all evening, particularly since, when we were discussing early Amendments on widows' benefits, some hon. Members opposite seemed anxious to prove that we had done so little for widows during our term of office. Now the Minister advises the Committee to reject the Amendment on the ground that we, in our period of office, did so much for the children of widowed mothers. That is very true. The differential of 17s. 6d. existed before the Bill. Indeed, since 1956, with the exception of the increase given in 1958, the widowed mother has had a preferential rate of increase for her children to that given to the sick and unemployed. I had hoped that even this time the right hon. Lady would still give a preferential rate of increase in view of what she has done for other widows.
The right hon. Lady will remember the comment of the National Insurance Advisory Committee, in its 1960 Report, when the draft regulations were before the Committee. Discussing how best to dispose of moneys in the National Insurance Fund in a way which would help the widowed mothers it said:
“Relaxation of the earnings rule will however mainly benefit widows whose family circumstances permit them to undertake a substantial amount of work or whose work is relatively well paid. It will not help the widow who cannot readily leave here children and go out to work.”
What we were hoping was that as the right hon. Lady has already helped those—and I agree that she has—she would also help the widows who cannot go out to work to the same extent by giving them a larger increase for their children.
I think, incidentally, that she put, during her speech, an excellent argument for bigger increases in absolute terms for [column 868]the children of the sick and the unemployed. As I pointed out twice already in comment on the Bill, it is a long time since such a small proportion of the increased benefit has been given in respect of children. I have the figures with me. In 1963, when there was a 10s. increase, children got 2s. 6d.; in 1961, when there was a 7s. 6d. increase, children still got 2s. 6d.; in 1958, when we gave a 10s. increase, children got 3s. 6d.
There has not been a time for many years when children have had such a small proportion of the total increase as they have got now, because it is not 2s. 6d. compared with 7s. 6d., it is not 2s. 6d. compared with 10s.; it is 2s. 6d. compared with 12s. 6d., the smallest possible increase in relation to children that could have been given. [Hon. Members: “No.” ] Well, I think so. [An Hon. Member: “Carping criticism.” ] It is not carping to the children of the sick and unemployed. It may be to the hon. Gentleman. Hon. Members opposite have a chance to put it up. They are not preferring the children of the sick or of the unemployed or of the widows. I was dealing with an Amendment concerned with the children of the sick or of the unemployed or of the widows. I was dealing with an Amendment concerned with the children of widowed mothers. It was the right hon. Lady who brought in the children of the sick and the unemployed.
I accept her explanation that, as we have done so much for the children of widowed mothers, she does not think that they should be entitled to a preferential rate of increase now.
There are one or two points I should like to take up. It amazes me how the hon. Lady tries to belittle all the very great improvements which we have made in the Bill. “After all” , she says, “we are abolishing the widows' earnings rule in the Bill. But what does that mean? It does not protect the children of widows” . I wonder whether the hon. Lady knows what happens to working-class widows? They have to go out to earn, and at the same time they have to care for their families in their homes. These are the widows who—apart from any other widows—will benefit from this Bill by the abolition of the earnings rule.
When someone on this side of the Committee said that the hon. Lady [column 869]should not carp about these things she said, “But surely one must carp for the sake of the unemployed” , but my whole case was that these Amendments do nothing at all for the children of the sick or of the unemployed. Consider the 12s. 6d. increase and the 21s. increase. Like the widow, the sick or the unemployed do not say when they get their benefit, “This is the benefit for the man; this is the benefit for the woman; this is the benefit for the first child; this is the benefit for the second child” .
What they say is, “Here is this sum which we are getting at the end of the week to keep the family” . When we add these increases of 12s. 6d., 21s. and 2s. 6d. there is no single family in Britain which is not really benefiting greatly under the Bill.
Dame Edith Pitt
I had not intended to speak again, but really the right hon. Lady must get her facts right. She has just referred to working-class mothers who will benefit by the removal of the earnings rule, who, due to their circumstances, go out to work. They are the women who will not benefit by the removal of the earnings rule. I said this in my Second Reading speech. The women who stand to benefit are the professional women who have high qualifications and who have thus high earnings and whose need for the present earnings rule—[Interruption.]—Well, if hon. Members on the other side of the Committee will tell me of many ordinary working women whose gross earnings are about £9 a week, which they must have to be affected by the earnings rule of £7 a week, I would be very glad to hear.
I am always glad to hear of women making progress, but in general the abolition of the earnings rule for the widowed mother is not going to benefit the women we should most like to help, the woman with young children who has certainly benefited in the past because the double amount given to her children is something which goes into that weekly sum to which the right hon. Lady referred. It was for that reason specifically that I hoped she would be prepared to reconsider the decision only to give the same amount to the widowed mother's children now as to other beneficiaries. [column 870]
I agree that there are the chronic sick and even, I suppose, some unemployed, who are on National Insurance for a long time and whose needs grow as long as they are receiving National Insurance benefits. But they are not the majority. If we go back two Amendments, the right hon. Lady was very concerned to prove, in respect of the abolition of the earnings rule for widows, that it was because it was not the widow's earnings but somebody else's earnings that it was felt right to remove the rule for widowed mothers and to retain the rule for the ordinary retirement pensioner.
The right hon. Lady cannot have the argument both ways. If the widowed mother is not expected to have earnings which will be affected by the rule, we must assume that she stands in the same position as the average pensioner claiming sickness or unemployment pay or who is in work up to the time that he has to fall back upon the benefit and who in the majority of cases has every prospect of returning to work. I still say that the widowed mother, especially, is in particular need of all the help we can give her, and that is why I ask the right hon. Lady even at this late stage to look with a little more sympathy at the Amendment.
Schedule agreed to.
Schedule 3 agreed to.