More credit misery looming?

Pensions Minister Andrew Smith is confident that the forthcoming Pension Credit is on track for October.

But one group, working on behalf of older people, has its doubts.

The benefit, offering a minimum guaranteed income for pensioners, including many who have retirement savings, is payable from 6 October, 2003.

It is estimated that four million households could potentially benefit from the new payment, but there are fears that the system might not be able to cope.

Confident

Working Lunch has covered extensively the problems that the Inland Revenue has had with the tax credit system launched for families this April.

Helplines have been swamped, administration errors have been rife, and payments have been delayed.

But the Minister believes the Department of Work and Pensions' system will be up to scratch when the new benefit starts in October.

"Our staff are working incredibly hard and I am confident that the work we are doing ... will ensure that as many pensioners as possible get what is rightfully theirs," says Andrew Smith.

Pensioners who already receive the Minimum Income Guarantee, (which will be replaced with the new credit) are being transferred automatically.

But a question mark lies over the roll-out of the credit to the two million households not receiving the MIG.

Awareness

A mailshot was started in April this year, but that will not be completed until April 2004.

And an advertising campaign will begin running this September, just one month ahead of the new credit going live.

Although pensioners will have up to a year to claim the credit and will be entitled to back-dated payments, there is widespread concern that awareness of the new credit is low.

"The government has made a small start writing to 20% of pensioners to get them on the credit already," says Richard Wilson, policy officer with Help the Aged..

"But more should have been done to ensure more people would be ready in October rather than during the year after it starts."

Richard Wilson: "Government should be more ambitious."

Richard is also concerned that the government has set its sights too low.

"They've only set themselves a 75% take-up rate over the next three years.

"In 2006 there'll still be over a million pensioners still not receiving the credit to which they're entitled."

Help the Aged thinks that the Department of Work and Pensions, the government division responsible for the pension credit, is being too cautious.

"Why bother introducing a benefit that many people, especially the most vulnerable, won't claim," says Richard.

Deluge

As for the system itself and whether it can cope, he thinks there's every chance that it could run into some of the same problems that previous benefit launches have encountered.

"The phone lines will be deluged by people who aren't eligible so that people who do need to talk can't get through. That's what happened with the Minimum Income Guarantee and its advertising campaign."

So does the advertising campaign stand a chance of getting the message across?

"It's a very complex benefit - so it will be very hard to tell in 30 seconds whether a pensioner will be eligible," believes Richard.

We'll be following developments closely.