Means testing could make things worse for those that need help most

It seems incredible that, in the name of cost saving and to prevent a few well off pensioners from receiving some pretty modest benefits, ministers can be entertaining the idea of extending means-testing.

Making people apply for benefits they are entitled to is notoriously inefficient. Pension Credit is not claimed by about 30 per cent of those eligible and Council Tax Benefit by about 40 per cent. When Gordon Brown refused to increase the state pension above the rate of inflation (with a freakish inflation figure in 1999 leading to a 75p increase), he argued that a means-tested Pension Credit was the efficient answer.

However, even he exercised a balance, by making the Winter Fuel Payments universal and restricting the free TV licence to the oldest – who are demonstrably the poorest part of our none-too-wealthy older population, and of course a means-tested claim costs ten times as much to process as an automatic one.

Bizarrely this proposal is surfacing as the ONS publish figures on the poverty risk facing older people ion the UK and the EU. It turns out, according to their figures, that older people in the UK are faring worse than their counterparts in most of the rest of Europe.

There are more than enough poor pensioners struggling with energy bills and food price inflation to maintain some parts of our benefit system which actually get help to them.

Some older celebrities were proud to proclaim last winter that they were donating their Winter Fuel Payment to charity – that is fine and that is their right. It is hard to imagine many of the seriously rich pensioners on the buses with their passes. 

Recent reforms to our state pension system are producing small improvements (and rather slowly), but overall the public expenditure on pensions and pensioners’ benefits in the UK is very low. No surprise, then, that barely half of our older population pay income tax, and less than 4 per cent come into the higher rate tax bracket.

Impoverished pensioners come at a cost to society. Cold homes are dangerous places, and the last Chief Medical Officer reckoned the cost of cold related illnesses to the NHS was nearly £1bn. Pensioners maintain their independence by using their bus passes, visiting friends, shopping around for bargains, and of course helping their families – if they were more dependent, they would be adding seriously to our already struggling social services.

Older people face a maze of inter-connected and overlapping benefits, the thresholds change every year, and they need help to understand their claim. Many give up on the process altogether. It really is the most cumbersome way to provide basic and fundamental support to people who felt they enjoyed a contract with society. They paid their due debts and taxes, and the state in return provides support.

The problem is not the handful of rich pensioners who are entitled to benefits, but the large numbers of poor pensioners who miss out.

Last year Age UK’s More Money in Your Pocket campaign helped 500,000 people put £120 million back in their pockets through free benefits information and advice. This year, we will continue to break down the barriers that prevent people from claiming. For more information, please visit www.ageuk.org.uk/moremoney

7 responses to “Means testing could make things worse for those that need help most

  1. The cost of means testing in administrative costs, extra civil servants, etc. is about 40 percent of the savings. So it could be seen as a public sector job creation scheme!

    • sorry PierrePierpont . yes you are right. none of those are means tested for pensioners though free prescriptions are available for certain conditions at any age and eye tests/spectacles and cold weather payments are means tested for those UNDER 60. but of course that doesnt concern this blog.

  2. we are already means tested for pension credit. and if on that then they know you have little or no savings.only thing they dont means test as far as pensioners is concerned is DLA or AA.
    to be honest, and i know this sounds biased. but they would save millions if these benefits were not paid to the millionaires and other rich folk with incomes of over a certain amount. given that they have to live off what they have got in the bank for the rest of their lives if unable to work. that balance soon goes down once they start dipping into it. but then once it IS down to a certain level then they can claim DLA /.AA again.
    i have however heard many older people say they are skint or similar when what they mean is they havent much in their purse.when asked/.”do you have money in the bank” they say yes but that dont count……..it does. specially to someone who has nothing (and i mean not one penny) in her/his purse/pocket and nothing anywhere to draw on.no one to even borrow from til next pay day/ and ppl ;like that DO exist. ive been there, years ago now, but nevertheless you dont forget what its like.

  3. elizabeth frampton

    Work with elderly disabled people most of whom refuse to ask for benefits even though they are entitled.

  4. @Hugosmum70 – To my knowledge they don’t means test the Winter Fuel Allowance or Cold Weather Payments or Free Prescriptions or Free Eye Tests or Free Bus Passes, etc….. So there would be quite a lot of additional means testing to be done if they go ahead with their plans.

  5. Idoit Tories! For what they’d spend on budgeting for changes/admin, it would cost more than LEAVING WELL ALONE!

  6. Sadly another of the ‘bright ideas’ from their somewhat inadequate ‘bright ideas’ department. It would start off as saving x pounds then someone would do the sums on how much it was costing to bring in and the level at which benefits would be paid would be reduced down to a better than break even point. The benefits would then be so low and so few qualifying it would, in the fullness of time, be scrapped / merged in with existing benefits.
    The only way it could work, is as people with increasing age become more confused about things in general, and would not know how to apply or even that it was available. Maybe that is the plan that they are relying on which is not nice but looking at what they have down with the public sector pensions, they are not nice people.

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