Item 3 is on pension credit. I refer members to paper 4, which is a note by the clerk and correspondence from the UK Government, the Scottish Government and Citizens Advice Scotland.
At our meeting on 7 March 2019, the committee received evidence from Citizens Advice Scotland and Age Scotland on forthcoming changes to eligibility for pension credit, which are due to take effect from 15 May 2019. Citizens Advice Scotland has provided supplementary information to the committee.
The committee agreed to write to the Scottish and UK Governments following the 7 March meeting and responses to those letters have been received and circulated. In a moment, I will ask for the committee’s comments in relation to those replies, but first I will put my thoughts on the record.
I remain dissatisfied with the UK Government position not only on the policy but on the rationale for implementing it. In its reply to us, the Scottish Government estimates that, by 2020-21, the policy will impact 3,800 mixed-age households to the tune of around £20.8 million, which is up to £7,000 for each household per year. The income guarantee for pension credit is £12,940, but it is £5,990 for universal credit—that is a stark difference. The Scottish Government’s reply also noted that the changes might impact some WASPI—women against state pension inequality—women.
I thank Guy Opperman, the Minister for Pensions and Financial Inclusion, for replying to us. In his reply, he said:
“It is important to be clear that this is about making sure that all working age people, irrespective of their partner’s age are subject to the same labour market approach and that taxpayer support is directed to where it is needed most.”
That is the policy intent and it is a reserved issue. I find it fanciful that we will treat pensioner households differently. The policy intent to keep all working households the same will create a variation in how we treat pensioner households, which will be to the significant detriment of many pensioner households. Those are my thoughts on the reality of what the policy intent will achieve.
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We also asked the UK Government about conditionality and sanctions that might apply to households in which a pensioner and a non-pensioner claim universal credit, and whether they would be subject to conditionality or sanction. The reply said:
“Pensioners in mixed age couples claiming Universal Credit will not be subject to any work related conditionality rules. However, conditionality for the working age partner will be tailored to meet their specific circumstances, just as it would for any other claimant.”
I have a concern that there could be a double detriment to some of those households, which could lose up to £7,000 a year. The working-age individual, who might have responsibilities in that household, could in theory—I admit that it is in theory—find themselves subject to conditionality, which could lead to sanction.
The committee spoke a lot, particularly during our previous inquiry, about those who will move over from the tax credit system to universal credit and whether conditionality or sanction should apply to them. The majority of the committee thought that that would not be appropriate. I accept that we will not change the UK Government’s policy position on that, even though the majority of the committee disagrees with it. However, I wonder whether there is scope for the committee to come together and say to the UK Government that, although we are disappointed that it is restating that policy position, we ask it to review the conditionality arrangements for mixed-age pensioner households, just to reassure ourselves that those households do not have a double detriment from the reforms that will be brought in on 15 May.
That is my view, which I wanted to set out. It is only appropriate that we have a discussion as a committee based on all the replies that we have received. Do members have any comments?