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Health Insurance -
Government fails to reach pension claims target |
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The government has announced it has scrapped an important target to get pensioner credit into more than three million households it was revealed today.
The target was hoped to have been reached by April this year but has apparently been missed by over half a million households. Despite the failed target, the Pensions Minister Mike O’Brien has controversially said he is not going to hand out payments to the over 65s (over 60s for women) without pensioners making a claim first. Although he would not set another date for the target of three million, O’Brien said he expected to get around 235,000 new claims in 2008.
Pension credit is designed to supplement the income of the over 60s to a total of £119.05 per week (a figure that will increase to £124.05 each week from April 7th), although couples are entitled to more. Right now, approximately 2.7 million households claim the pension credit and that figure has stayed around the same for the last three years. It is currently thought 0 over 4 million households are eligible for pension credit, although up to 4 in ten households are not claiming what the money they are entitled to.
The BBC’s Money Box program spoke to Sally West of Age Concern, who said: "Individual people who are entitled to pension credit but do not claim, are missing out on an average of £26 a week, which can make a big difference to people living on a low income. If you take the three benefits - pension credit, council tax benefit, housing benefit - the estimate is that up to £4.6 billion is unclaimed each year."
The government’s Pension Service has claimed in its latest business plan that: "it would not represent value for money to repeatedly press unwilling eligible people to take up their entitlement," and Mike O’Brien confirmed this when also speaking to the BBC’s Money Box programme. "We've pretty well got to saturation in terms of those people who are likely to just apply,” he explained. “We can work as hard as we can, but when we are contacting people five times over an 18 month period and they are still saying 'we don't want to apply' there is a limit to how far you can go."
"Our target now is 235,000 new applications [per year] by the end of the month and we are on target for that,” he also added. "What we are not going to do is continue with a target which it was clear we are not going to meet. I am not setting a target of 3.2 million for another date, no."
The pensions issue has long been the subject of debate; it has been argued that a lot of pensioners and especially those in cities who rely on the state for their pension struggle to meet ends meet week to week. As well as sometimes finding it difficult to meet the rising cost of utilities, such as gas bills, premiums for certain types of cover, such as health insurance, are also higher when you reach 60.
The debate still goes on, but Mike O’Brien is standing firm; he is not going to give handouts automatically without people making a claim for pension credit first. "We do of course look at the information we have through the tax system to see if we can encourage people to claim,” he said. "We try to make it as easy as possible and by October it should all be automated. They make one call and get state pension, pension credit, council tax benefit and housing benefit, assuming they are entitled to it."
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