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Social Security

Of course if we had introduced the increase by earnings this year, it would been lower than the change that we are making by using the RPI. We have said that we will restore the link with earnings, either by 2012 or before the end of the next Parliament. That is our commitment—the Conservative party abolished the earnings link and we have said that we will restore it. As I said, this Government are spending about £13 billion more on our pensioners in general. This morning, I tabled a statement—I did inform both the Opposition Front Benchers about it—explaining two supplementary issues concerning payments of invalidity allowances to pensioners from April 2009. In December, we announced new rates of invalidity allowance for customers under pensionable age to support the alignment of the rates of incapacity benefit and employment and support allowance. The rates for eligible pensioners due to receive invalidity allowance will be increased in line with the RPI in the usual way. The Department subsequently wrote to pensioners eligible for an invalidity allowance informing them of their entitlements, however, because of a technical error a number of incorrect entitlement notices were sent. That means that about 45,000 people may be overpaid and about 25,000 may be underpaid, depending on their individual circumstances. Weekly overpayments will range from a minimum of 5p to a maximum of £3, and the maximum underpayment will be £1.80 a week. Any arrears will be paid to customers, and we will not take any action to seek recovery of the overpayments. As the Department works through the affected areas, we will write to all customers who are affected to explain their position. As people become pensioners from April 2009, they should automatically move on to the higher rate of invalidity allowance. Because the uprating order for this year does not provide the statutory basis ordinarily needed to make these higher payments, we shall be making them on an extra-statutory basis in the coming tax year—about 7,000 customers are affected, and the payments involved total about £350,000. Obviously, I am sorry that this unfortunate situation has occurred, but the issue is a technical one and we will put it right.